Some Turkish manufacturers pause production after Iran gas supplies disrupted

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ISTANBUL, Jan 24 (Reuters) - Some Turkish manufacturing companies have halted production temporarily after Iran cut gas flows last week for up to 10 days due to a technical problem.

Companies affected include car parts maker Ege Endustri (EGEEN.IS), cardboard manufacturer Kartonsan (KARTN.IS) and defence and automotive parts maker Katmerciler .

Turkey is almost fully dependent on imported gas from Russia, Azerbaijan and Iran, which suspended gas flows to the country last Thursday, saying there was a technical fault at a pressure-boosting station in Turkey.

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Ege Endustri said on Monday it will stop output at a factory until the weekend due to power cuts, and cardboard manufacturer Kartonsan said it was stopping production until further notice due to limited gas supply.

Katmerciler on Sunday said it will halt production during the electricity cut but that it did not expect the planned cut to impact business, without elaborating.

Iran said its gas exports to Turkey had resumed on Friday but a Turkish official said those supplies were lower than the required volumes. Turkey has denied that the problem was due to a fault at a pressure station on its side.

Turkish authorities have announced planned electricity and natural gas cuts to large consumers in industrial zones and electricity-generating power plants due to limited supply from Iran. read more

Turkish Industry Minister Mustafa Varank said that the manufacturing sector should be able to weather the drop in production due to power cuts.

"The industry sector is strong enough to overcome this period that will last for a few days," Varank said during a speech at the opening of a furniture fair in Istanbul on Monday.

Food producers say a planned 72-hour electricity cut to industrial zones would risk food safety and pose a threat to goods in storage units.

"...Cold storage units need electricity. Energy limitations pose a serious risk to food safety," said the Organic Producers and Manufacturers Union, requesting an exemption from gas and electricity cuts.

Iran provided 16% of Turkey's natural gas needs in the first 10 months of 2021, according to the latest official data.

Energy prices have risen sharply in Turkey, driven by global increases and a 44% decline in the lira's value against the dollar last year.

Electricity prices were raised as much as 125% for high-demand commercial users this month and by around 50% for lower-demand households. read more

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Reporting by Ceyda Caglayan; writing by Ezgi Erkoyun; editing by Daren Butler and Susan Fenton

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