India: Tough Time for Re-bar manufacturers in Andhra Pradesh & Telangana

After the recent bifurcation of Andhra Pradesh and Telangana state, the small & medium steel industry is struggling with tough situations.

Nearly, 50 Re-bar units spread across major districts in both the states where 70% units are of Telangana and rest 30% are based in A.P, which are suffering from various industrial problems on political woes.  Demand majorly comes from Andhra Pradesh region.

Major Impact after Bifurcation

• High power tariffs
• Acute power shortage
• Imposition of 2% CST

The electricity charge in these states, which is almost INR 6.25/unit, is already highest as compared to other states across the country.

The major plants in both the states are running at round 60-70% of the installed capacity owing to power cut along with improper power supply. Moreover, steel mills of both states have to face severe competition from neighboring states like Chhattisgarh (which is power surplus and low tariff), Tamil Nadu, Karnataka, Maharashtra and others.

The secondary Re-bar prices in Hyderabad have fallen by almost INR 1,000/MT in the last one week.

 Indian Re-bar (12 mm) Prices as on 8 Jul, 2014

Basic prices, E.D & VAT extra