North India Ingot manufacturer facing closure issue due to squeezed conversion gap. Furnace located in North India majorly depends upon scrap as their raw material (unlikely sponge Iron) and over last two months shortage of scrap has increased due to non viability of imported scrap and low availability of domestic scrap. Due to which they are forced to buy sponge from central and eastern India which make them non competitive.
SteelMint learned presently many TMT mills are eyeing central and eastern India market to purchase low price MS Ingot over their local supplier. Muzzafarnagar MS Ingot is offered at Rs 30850/MT (Basic) whereas Raipur Ingot are offered at Rs 30,400-500/MT. Similar deal herd in Gaziabad market where major MS ingot is being delivered by Raigarh (Central India) over discount of Rs 300-400/t from local offers.
Market participant said, “Manufacturer of MS Ingot are facing tough time to compete with Central and Eastern market due their higher cost of electricity and non availability of Scrap over low cost, of sponge and electricity available to Central and Eastern India”
This year electricity in U.P has increased twice by almost 20-25% as it prevail at Rs 6.75 per unit, whereas cost of electricity in Chhattisgarh is at Rs 4.75 per unit that is being herd to increase to Rs 5.25 anytime soon.
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