Iran's Energy Crisis; Closure of 13 Million Tons of Cement Production Capacity

The head of the Iranian Cement Producers Association stated that due to the energy shortage crisis, the country's cement production is 13 million tons below the nominal capacity of cement plants. Hamid Farmani emphasized on Tuesday, February 5, that the nominal cement production capacity in the country is estimated to be around 80 million tons per year, but issues such as energy imbalance, power and gas outages, and reduced demand have brought actual production down to below this amount. Statistics from the Ministry of Industry, Mine, and Trade for the first eight months show that clinker (the raw material for cement) production has dropped by 3 million tons compared to the same period last year, reaching 50 million tons. Radio Farda's analysis of Chamber of Commerce data also indicates that the crisis in providing electricity and fuel for cement production units has escalated to the point that, with the closure of cement plants, Iran has for the first time this year begun exporting clinker, earning $77 million from clinker exports to predominantly Arab countries in the region in the first six months of this year. The shutdown of production in '22 cement factories' in Iran due to a gas shortage has made Iraq, the largest market for Iranian cement exports, the biggest buyer of clinker from Iran in the first half of this year. Statistics from Iraq's Ministry of Industry and Minerals show that cement production in Iraq grew by 7% last year, reaching 10.6 million tons. Mr. Farmani also pointed out that the continuous and positive growth of Iraq's cement industry poses a serious challenge for Iran. The situation in Iran's steel and petrochemical industries is even worse due to electricity and gas shortages; petrochemical units are operating at 70% capacity, and while according to the World Steel Association, Iran's crude steel production capacity is over 40 million tons, only 31 million tons were produced last year. Alongside large industries, small industries in Iran have also been severely affected by electricity and gas shortages. According to estimates from the Research Center of the Parliament, the losses incurred by small industries from power outages this summer alone have amounted to 43 trillion tomans.