Indian internet resource that steel production in the country has fallen due to rising coal prices and electricity tariffs. At the same time, the demand for steel products fell due to the sharp increase in their prices in February-March, so metallurgists are unable to pass their costs on to final consumers.
The decrease mainly affected small steel mills that produce steel in electric arc and induction furnaces. Many use sponge iron, which is obtained in India using coal technology, as a raw material.
India has faced severe coal and electricity shortages in the past weeks, as it did in the fall of 2021. Electricity supply to industrial consumers in Andhra Pradesh has already been decreased by 50% and tariffs have increased 4-6 times compared to last year. In some other states, restrictions are planned for May-June.
The cost of imported thermal coal used by Indian sponge iron producers has nearly doubled since the end of last year. Local - about a half, but not enough.
As a result, steel production in electric arc and induction furnaces down by 50% in Andhra Pradesh and by 30-40% in some. At the same time, it produced 55.3 percent of the nationwide steel in March, corresponding to 5.42 million tons per month.
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