Raigarh based induction furnaces may close their production today as Jindal Steel has given final notice to disconnect power supply from 2:00 p.m because of non-payment of cess charges, which is around INR 1.5 crore per furnace.
Raigarh based induction furnace operators have confirmed that they have received power cut notice by Jindal Steel, which is the only source for power in Raigarh. They further added that power supply will be disconnected today by 2:00 p.m.
An Ingot manufacturer confirmed to receive the notice from Jindal, in which the company said, “We have issued supplementary bills, temporary disconnection notice and reminder letters to each consumer in their favour. Hence, we need submission from each individual consumer. Submission from RIUS is not acceptable. It is also noted that we will disconnect power supply from 01 Nov, 2014 at 2.00 p.m of the consumers from whom proposal will not receive to us as well as accepted by our management.”
It is expected that after power cut, Sponge iron prices will decline in Raigarh as well as in Rourkela because Rourkela is one of the major suppliers of Sponge iron to Raigarh. Market participants mentioned that post closure of furnaces in Raigarh, Ingot/Billet prices in nearby by states (U.P, Punjab & South) are likely to move up for short-term. The price rise will be seen in the market because Raigarh is a major source from Central region to supply semi finish material to these markets.
Yesterday offers for commercial Ingot are INR 29,000/MT ex-Raigarh on regular payment basis. While, at present, induction operators are not offering MS Ingot and MS Billet as dispatches are due earlier and now this notice of power cut will halt the production.
Yesterday, Sponge iron (C-DRI) is being offered at INR 21,000/MT ex-Raigarh and Pellet sponge (P-DRI) offers are hovering in the range of INR 18,800-19,000/MT ex- Raigarh.
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