India: Steel Industry in Maharashtra opposes withdrawal of Power Subsidy

Last week, Maharashtra government withdrew the power subsidy of INR 1.50 per unit enjoyed by the Steel Industry wef Nov’14.

Currently, Electricity tariff in Maharashtra is the highest in India prevailing at INR 7.82 per unit. It has become unsustainable for all the consumers & companies to operate in Maharashtra and compete with the cost of production from Chhattisgrah and Gujarat, SteelMint learned from industry sources.

Wada (Mumbai) Induction Furnace Association’s President says,”Industries cannot even purchase power through power exchanges or open access since Commission has framed the long pending open access regulations in such a way that since then no transactions have taken place. In addition, MSEDCL is not providing NOC in time bound manner and applications are kept pending.”

Today, all Steel Associations of Maharashtra are assembling (Wada/Vidharba/Jalna Steel Association) in order to surrender the power to Maharashtra government if subsidy will not continue till Jan’15.

Source close to the matter said, ”We have to request Hon’ble Chief Minister to continue subsidy only to industrial consumers for 3 months more i.e. upto billing month of Jan’15 and after that the order of Commission for IC charges shall withdrawal.”

North India Semi Finish Prices remain firm

MS Ingot/Billet prices in Mandi Gobindgarh (Punjab) remain firm owing to shortage of Scrap and low production.

Mandi Gobingarh is considered as epicenter for market sentiments. Any major price movement regulates markets across the country.

A furnace operator based in Mandi said, “Prices are firm due to limited production as our cost of operation is high and demand remains dull.”

Mandi Gobindgarh comprises of over 300 Iron & Steel units (large and small) including induction furnaces and rolling mills. Out of the total, about 30 to 50% units are operational at present, assessed by SteelMint while speaking to local manufacturers.

A Billet trader based in Mandi urged, “Due to shortage of trucks from Eastern (Durgapur & Rourkela) & Central India (Raipur, Raigarh & Bhilai), our material (MS Billet) from these regions has still not been delivered. In addition, we have to pay INR 200-300/MT higher owing to low availability of vehicles.”