16% Growth in Domestic Market Supply by Khuzestan Steel

Despite unprecedented and unfair electricity restrictions, which caused a loss of 700,000 tons of production in the first half of the year, Khuzestan Steel Company, through effective management, planning, and significant effort, successfully supplied the domestic market. The company experienced a 16% growth in the supply of steel billets, slabs, and sponge iron compared to the same period last year.

In the first half of this year, Khuzestan Steel sold a total of 1,136,400 tons of products—including steel billets, slabs, and sponge iron—on the Commodity Exchange’s industrial board, reflecting an increase of about 157,000 tons (16%) compared to the previous year. This growth was achieved despite the unfair burden of electricity shortages disproportionately imposed on this major steel producer in southern Iran. The company’s developmental strategies over the years, especially the commissioning of Zamzam 3, the largest sponge iron mega-module in Iran and the region, in winter last year, helped offset some of the production losses in steelmaking by increasing sponge iron production.

Despite being subjected to harsher electricity restrictions than other steel producers in the country, Khuzestan Steel maintained its leadership in the Iranian steel billet market, remaining the largest supplier. In the first half of this year, a total of 2,997,873 tons of steel billets were traded on the Commodity Exchange, of which Khuzestan Steel contributed 489,100 tons, securing a 16.3% share of the market.

Under significant pressure from electricity shortages, Khuzestan Steel focused on boosting production in direct reduction units, resulting in a staggering 161% increase in sponge iron transactions on the Commodity Exchange compared to the previous year, reaching 490,300 tons in the first half of the year.

The total volume of sponge iron and briquette transactions on the Commodity Exchange during this period was 5,869,850 tons. Supported by the Zamzam 3 mega-module, Khuzestan Steel captured an 8.4% share of the national sponge iron market, achieving a solid position in this sector for the first time in its history.

Moreover, the total sponge iron transactions by Khuzestan Steel Group—including Khuzestan Steel, Shadgan Steel, and Qaenat Steel—reached 1,236,850 tons, representing a significant 21.1% share of the Iranian sponge iron market. Additionally, Khuzestan Steel supplied 157,000 tons of slabs to the domestic market, securing a 26.1% share of all slab transactions on the Commodity Exchange.

It is evident that imposing unfair electricity restrictions on foundational and job-creating industries has caused irreparable damages. Without these limitations, Khuzestan Steel could have set remarkable records this year. Despite losing 700,000 tons of steel production in the first half of the year due to these unprecedented restrictions, the company made every effort to supply the domestic market efficiently, overcoming challenges and restrictions with success.

Notably, alongside domestic supply, Khuzestan Steel managed to export over 380,000 tons of products directly and indirectly, contributing to the country’s foreign currency needs.

(By Maziyar Jafarieh)