According to foreign media reports, Houshang Goodarzi, the head of Iran's aluminium industry organization, said that due to repeated shortages of electricity and natural gas, Iran's annual aluminium ingot output is about 560,000 tons, which is lower than its installed capacity of over 650,000 tons.
According to Goodarzi, for Iran to achieve full operation of its electrolytic aluminum production capacity, it needs a supply of 1.3 million tons of alumina. However, currently, only 250,000 tons can be supplied domestically, and the rest relies on imports. But imports are frequently restricted by foreign exchange.
Of Iran's current annual output of 560,000 tons of aluminium ingots, approximately 450,000 tons can meet domestic demand. However, importing alumina requires hard currency, so a large amount of aluminium ingots are exported for raw material purchases. In fact, only about 300,000 tons of production are supplied to the domestic market.
Meanwhile, downstream industries such as aluminum foil, sheet materials, auto parts, and wire and cable are facing a downturn, mainly due to power outages and frequent production halts. Goodarzi explained: "The upstream industry is still producing and supplying raw materials as planned, but consumption has declined. In recent weeks, most of the inventories on commodity exchanges have not been sold."
He added that customs clearance restrictions and the central bank's foreign exchange allocation have further exacerbated the tension in the industry. Although some producers adopt barter trade or choose other currencies, the constantly rising exchange rate is still pushing up costs.
In addition, aluminium production is highly dependent on a stable power supply. Once there is a power outage or gas cut-off, aluminium production will be interrupted, forcing smelters to shut down electrolytic cells, which incurs huge costs. Goodarzi said he hopes the power shortage will ease by the end of summer, but the tight supply of natural gas in winter may become a new challenge.
