A sharp decline in steel production has been recorded in Georgia – about 60% of production capacities are effectively shut down. According to Merab Lominadze, head of the Association of Electricity Consumers, the key reason is the high cost of electricity, which has made the operation of factories unprofitable amidst an unfavorable global market situation.
The situation has affected both ferroalloy and metallurgical enterprises. Out of approximately 20 companies in the sector, only two large plants continue to operate relatively stably, while the rest have either reduced production or suspended operations. In metallurgy, among the three major producers, capacity utilization has also significantly decreased, despite the country's potential ability to fully meet domestic demand and even export products.
It is noted that electricity tariffs for Georgian steel producers are 2–2.5 times higher than in neighboring Turkey and Azerbaijan. This makes products uncompetitive and leads to an increase in imports while simultaneously reducing domestic production. Experts warn of the risks of job losses, capital outflow, and deterioration of macroeconomic indicators, calling for a review of energy policy and the development of a plan to restore the industry.
