According to the Trade, Mining, and Steel News Agency, the unprecedented increase in energy carrier costs has fundamentally changed the financial equations of the steel industry. An examination of the performance of steel companies in the first two months of 1405 reveals that although sales revenue is gradually being restored, the sharp growth in electricity and gas costs, along with the continuation of energy supply restrictions, has posed a serious threat to the profit margin of the country’s second most profitable industry. A detailed analysis of monthly performance reports indicates that the return of revenues does not necessarily mean improved profitability, as production costs are increasing at a faster pace than sales growth, a phenomenon that is particularly evident in the energy sector.
A comparison of the energy costs of iron and steel companies in the first two months of 1405 with the same period last year shows a widespread and worrying trend. During this period, Keghhar recorded a 243% growth, Fasbazavar 175%, Fakhass 149%, Arfe 100%, Kavir 96%, Fulad 80%, Fjahan 76%, Siscou 74%, Kgal 49%, Kchad 46%, Kaveh 44%, and Zobahan 33% increase in energy costs. From a monetary perspective, there are also significant differences between companies, with Fulad Mobarakeh recording the highest energy cost of approximately 9,830 billion tomans. Following this, Fulad Khuzestan with 4,445 billion tomans, Fulad Kaveh South Kish with 1,786 billion tomans, Jahan Fulad Sirjan with 1,666 billion tomans, and Zobahan Isfahan with 1,599 billion tomans rank next. These figures show that energy costs account for a significant portion of the production cost, and any fluctuations in this sector directly affect the companies’ profitability.
A notable point in this regard is that the steel industry, despite its strategic position, is the first to face energy restrictions, cuts, or rationing in the event of electricity or gas imbalance. This is while the industry, after petrochemicals, is the country’s second most profitable industry, playing a key role in non-oil exports, job creation, and earning foreign exchange. The continuation of these restrictions will not only reduce production volume but also increase overhead costs, reduce operational productivity, and ultimately lead to a decline in the profit margin of steel companies.
An examination of the data reveals that only a limited number of companies have reported a decrease in energy costs, including Hermez with a 5% decrease, Fulad Khuzestan with 74%, Faghdar with 82%, and Fasba with 85%. However, this decrease cannot be considered an achievement in terms of productivity, as it is largely due to a decline in production volume. It is also worth noting that Fulad Mobarakeh and Fulad Khuzestan were targeted during the “Ramadan War” and lost part of their production capacity. The forced shutdown or reduction of production lines in these two companies has resulted in reduced energy consumption and, consequently, lower energy costs in their two-month performance compared to the previous year.
Finally, summarizing the statistics from the Steel Think Tank and