An integrated steel plant based in India’s Maharashtra has chosen to stop its gas-based DRI (sponge iron) operations owing to the sharp rise in natural gas prices which has trigerred a phenomenal surge in input costs, as per latest updates with SteelMint. As a result, the steelmaker has floated purchase enquiries for sponge from other markets.
The company’s steelmaking facility located in Dolvi serves a variety of sectors including automotive, projects and construction, equipment, LPG cylinders, cold rollers, oil and gas, and consumer durables.
In India, natural gas availability for the steel industry is becoming increasingly limited as costs are rising globally as a direct fallout of the Russia-Ukraine war and surging energy inflation. It is anticipated that the use of natural gas to power this DRI plant may no longer be economically feasible.
Key points
- The company’s DRI facility in Salav produces between 60,000 t and 70,000 t on monthly basis which is primarily for captive consumption. The steel producer is targeting to buy from major players in Karnataka and Chhattisgarh.
- Around 40,000 t of DRI may be procured from in-house facilities in Chhattisgarh’s Raigarh and Bellary in Karnataka.
- The remaining 30,000 t of DRI may be procured from the big players in Karnataka and Chhattisgarh, although other markets are also under consideration.
According to company officials, the Salav plant will start only when gas prices return to normal.
Leave a Reply