India: Chhattisgarh's Raigarh to Add 0.5 MnT Billet Capacity

Raigarh District in Northern Chhattisgarh (Central part of India) may soon become a major hub for standalone ingot and billet production within the current Calendar year. According to on-the-ground information, work on number of induction furnaces is to be completed within the current year while few induction furnaces have already started production.

The new mills after commissioning would take the total number of small steel mills in the area to 40. Among the operational mills in Raigarh 24 are induction furnaces while 4 are electric furnaces.

The presently operational mills have been consuming about 95 MW of power and a provision for additional power supply of 95 MW has also been made to cater to the upcoming plants in the OP Jindal Industrial Park, PunjiPatra.

Further local trade sources also informed SteelMint about a 1,200 tonnes/day capacity re-rolling mill being set up in the area by PC Rathi Group (Delhi).

What can be expected?

According to SteelMint assessment, the increased capacity is likely to keep merchant billet prices under pressure owing to additional production. Raigarh can emerge as a strong market for billet purchasers.

Similarly, prices for sponge iron in the Central India region would likely remain supported owing to rising demand for the vital raw material for Induction furnaces.

What is driving this expansion?

?Among a few reasons, the availability of low cost raw material is one of the major driving forces behind the continuous rise in billet manufacturing capacity in Raigarh.

Both key raw materials Iron Ore and Coal are available to the district in abundance and at low transport cost. Another major advantage would be Raigarh’s geographic location.

Situated in the northern part of the Indian state of Chhattisgarh the District is in close proximity to Uttar Pradesh, Madhya Pradesh and Bihar where internal steel production is quite low.

This give producers the opportunity to explore virgin market for billet. Further the introduction of GST has improved inter-state transport tremendously giving producers the opportunity to foray further towards North India.