India: Power Price to Revise in Central India

The small and medium scale steel industries hub in Chhattisgarh (Central India) may soon get revised power tariff for FY17-18. The subsidy of INR 1.40/unit that was applicable from Sep’16 will expire on Mar’17.

In Sep’16, the Government of Chhattisgarh has announced subsidy of INR 1.40/unit over the strike of small and medium scale manufacturers which will expire on Mar’17.

Currently the manufacturers in Raipur are paying power charges after subsidy at approx INR 4.80/unit and if subsidy will be reversed it will cost INR 6.20/unit from Apr’17.

As per sources close to the matter, “Instead of INR 1.40/unit subsidy government is ready to subsidies power charges by INR 0.90/unit”. However official confirmation is awaited.

A billet manufacturers in the Raipur added “Considered INR 1.20/unit remove rebate and 800-850 units consumption to produce 1 MT MS Ingot/Billet, our production cost will increase by INR 1,000- 1,200/MT.”

It is to be noted that despite sharp increase in billet prices in a month duration, the conversion spread from sponge P-DRI to Billet remained low and evaluating in and around INR 9,500/MT, which required at INR 10,000/MT, according to the manufacturer.

A senior person of Chhattisgarh Steel Association reported, in Raipur around 150 Mini Steel plants (re-rolling mills) & nearly 130 are standalone EAF/IF which produce Ingot/billet and almost all the plants are operational currently and are based in Industrial area of Urla & Siltara.

Power Charges in Major Steel Producing States in India