Posted on 23 Nov 2021
The National Iranian Gas Company has notified its steelmaker customers of natural gas supply curtailment during the coming winter. The curtailment is effective from the date of issuance of the letter, 13 November; however, it is anticipated that the gas flow reduction will be really felt from mid-December onwards, Kallanish notes.
According to a mill official who received the letter, the first phase involves a 22.6% reduction versus actual gas consumption, while the second phase imposes a limit by 43%. The Third phase will curb actual consumption by 65%.
The colder the temperature, the greater the reduction in gas supply will be imposed. Some steel producers will not receive any limitation; however, the country’s steel giants will suffer. Direct reduced iron and hot-briquetted iron producers will also be affected, since all DRI output in Iran is gas based.
Iranian steelmakers suffered from electricity curtailment during the summer period, while finished steel output was reduced by nearly 7.5% year-on-year during the seven months through 22 October.
Due to a drought last winter, hydro-electric power plants could not generate sufficient electricity. This was exacerbated by illegal bitcoin mining, which consumes up to 2,000MW of electricity compared to 300MW used by legal bitcoin operations. Iranian state-run electricity firm Tavanir claimed the country has only 50 licensed bitcoin farming plants, and 85% of mining is being carried out illegally (see Kallanish passim).
Source:Kallanish
