Maharashtra based steel industries to get relief as the government has reduced power tariff in the range of INR 0.17-1.50/unit. Induction furnace operators will get more benefit from this step.
The Maharashtra government has recently reduced power tariff in different industrial areas like INR 1.30-1.50/unit in Vidharbha, INR 1.00/unit in Jalna, INR 0.45-50/unit in Nashik and INR 0.17-20/unit in Wada (Mumbai).
In general, induction furnace consumes approx 650-700 units to produce 1 MT of MS billet. Considered the above relaxation in tariff, production cost will reduce by INR 150-700/MT as per the location. According to sources, reduced power tariffs are applicable from 1 Apr’16. However, manufacturers haven’t received any confirmation (notification) on this yet.
Sources reported that major industrial areas in Maharashtra are Jalna and Vidharbha, where around 20-25 big running units are producing billet & rebar and selling across Maharashtra. While in Nashik & Wada, there are less number of units i.e. around 10-14 units.
Steel prices in Maharashtra to remain under pressure
Steel manufacturers will not reduce their prices immediately as they will wait for monthly cycle of electricity bill. However, an agent, who largely supplies billet & rebar within Maharashtra said that after news of reduction in power tariff, limited buying requirement has been received. This may lead to further fall in prices. During a week, billet & finish long steel (rebar & structure) prices in Maharashtra have fallen by INR 500-600/MT.
Ex-Mumbai steel prices as on 30 Jun’16
| Particulars | Prices | D-o-D | W-o-W | M-o-M |
| Scrap (HMS 80:20) | 16,000 | 0 | 0 | -200 |
| MS Ingot | 21,800 | 0 | -500 | -1,100 |
| MS Billet (100*100 mm) | 22,000 | 0 | -500 | -1,100 |
| TMT (12 mm) | 25,100 | -100 | -400 | -1,300 |
| 40 Angle | 26,500 | 0 | -450 | -600 |
Basic prices in INR/MT
Source: SteelMint Research
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