Activity Decline at Zanjan Steel Plant Signals Market Supply Risks

Introduction

Located in Zanjan, Iran, the West Alborz Ana Steel plant is a key producer of semi-finished billets, with an annual production capacity of 1,500 tons. The facility, owned by West Alborz Ana, serves various sectors and plays a crucial role in regional steel supply chains.

Activity Changes Over Time

Recent satellite observations indicate a concerning trend of diminishing thermal activity at the plant, with an overall activity change of -6.58%. The decline, categorized as an orange alert, was noted particularly in the Electric Arc Furnace (EAF) and Pelletizing Plant operations, suggesting operational difficulties:

The data reveals a steady decline in EAF activity, with a drop from 57% in late November 2024 to 50% by April 2025. The Pelletizing Plant has also followed a downward trajectory, indicating potential issues in meeting production demands.

Market Implications

The decline in activity at the West Alborz Ana Steel plant raises concerns regarding supply reliability for buyers in an already volatile market. Recent trends in global steel production, as reported by the article WV Stahl struggles to foresee German production stabilisation, point to widespread production challenges across the sector, which may exacerbate supply constraints. Moreover, with global ferroalloy prices witnessing slight declines due to stagnant transactions (Global ferroalloy prices slightly declined in late March), steel producers might face higher costs if production limitations persist in the wake of both internal decisions and broader market conditions.

With further operational risks tied to fluctuating demand and external market pressures, steel buyers and investors should brace themselves for potential bottlenecks and price volatility in the upcoming months.