Iran’s steel industry grinds to a halt due to electricity cuts
Nearly all steel production units in Iran have shut down due to severe electricity shortages, according to a senior industry official.
Nearly all steel production units in Iran have shut down due to severe electricity shortages, according to a senior industry official.
Vahid Yaghoubi, a member of Iran’s Steel Producers Association, said steelmakers have faced a 90% power cut since late April, leaving many factories with just 2–3% of their required electricity -- “not even enough to light facility walkways,” he told state media.
While some industrial zones have retained limited access to electricity, steel producers have borne the brunt of the nationwide power crisis, he said.
The energy restrictions, originally presented as a temporary two-week measure by the Energy Ministry, have stretched over two months now, Yaghoubi added.
“Almost all steel plants are now shut,” he added, saying that even companies that invested in their own power plants -- known as Article 4 facilities -- have been unable to use their electricity due to government intervention.
The Energy Ministry has requested control of these privately funded power stations to manage the national grid. Industry officials argue that the move contradicts existing contracts that prioritize use of this energy for the companies that invested in such power stations.
Iran’s steel industry, which produces over 30 million tons annually and is among the world’s top ten producers, plays a key role in the country’s non-oil exports.
Some firms have turned to Iran’s energy exchange to buy “green electricity” at premium prices in an attempt to keep minimal operations running. However, Yaghoubi said even these paid deliveries were disrupted, with some companies experiencing arbitrary outages.
18,000 workers unpaid at Esfahan Steel Company
The crisis has rippled beyond production, with some companies now unable to pay workers due to frozen accounts and mounting financial strain.
The head of Esfahan Steel Company, Iran's largest, said on Tuesday that the wages of 18,000 workers have been delayed after Iran’s tax authority froze the firm’s bank accounts over unpaid taxes, according to local media.
Ardeshir Afzali told ILNA news agency that the Tax Organization has withdrawn substantial funds from the company’s accounts but has yet to lift the freeze.
He criticized the move, saying authorities “do not understand the fragile post-war economic conditions or the difficulties facing producers.”
