The iron ore e-auction in Karnataka is expected to bring down the
profitability of steel mainly for sponge iron companies in Karnataka & nearby
locations.
The Indian Iron and Steel
industry has witnessed a sea of changes over the years with respect to
technology and innovation, business strategy and other related issues. However,
some significant issues have cropped up during the recent times related to the
non-availability of key raw materials (iron ore, coking coal) and hence, there
is a sharp rise in price of finished steel and a shortage in supply.
Moreover, due to high input costs
and non-availability of raw materials (a blanket ban on iron ore mining in
Karnataka by the Supreme Court for fear of large scale environmental
degradation via illegal mining, is one of the key contributors), certain steel
producers are under utilizing their capacities and foresee having to shut down
their operations- if the scenario worsens.
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