Maharashtra Increases Power Tariff by 0.60-0.90 Paisa/Unit

Maharashtra Steel Units are facing tough time with the hike in power tariff effective from 1 June’15. MS billet’s production cost may surge by INR 500-600/MT.

Recently, Maharashtra State Electricity Distribution Company Limited (MAHADISCOM) has surged power tariff in the state by 0.60-0.90 paisa/unit w.e.f. 1 June’15. The current power tariff applicable from this month is be approx INR 6.5-7.0/unit, stated a well reputed MS billet and rebar manufacturer in Mumbai. He added that power tariff in Maharashtra is also being adjusted by FOCA (Fuel and Other Cost Adjustment) and MAHADISCOM has not clarified any details of FOCA.

Power tariffs were increased owing to rebate reduced in night power tariff from INR 2.5/unit to INR 1.5/unit and that has made power prices costlier by INR 1.0/unit, shared a Jalna based manufacturer. He mentions that load share factor has risen to 220 kVA; and it will have marginal effect.

As per industry sources in Mumbai, power tariff bill received in month of Apr’15 was approx INR 6.3/unit, which decreased to INR 4.8-5.0/unit for the month of May’15 owing to low FOCA charges in the bill. Expected power tariff bill for Jun’15 will be approx INR 6.5-7.0/unit. In general, to produce 1 MT of billet, 600 unit of power is required.
As on 26 Jun’15, MS billet prices are assessed at INR 26,300/MT.

Imported Billet Offers may Become Attractive

Imported billet from China is currently being assessed at USD 345-350/MT, CIF Mumbai for July’15 deliveries. If MS billet prices in Mumbai surges above INR 27,000/MT levels, imported offers may become lucrative to rolling mill against domestic billet offers.