India: Raigarh Based Induction Furnaces Cut Production Amid Power Cuts

Raigarh based induction furnaces have to cut down their billet and ingot production by about 40-50% owing to power cuts. Raigarh is one of the prominent merchant billet and ingot producing region, located in central part of India. Region has about 25-27 induction furnaces, which has an annual production capacity of  0.070 to 0.80 million tonnes.

These furnaces are installed in Jindal's industrial park in Raigarh which supplies power to these furnaces. Power supply from Jindal Power Ltd has been irregular from last few days owing to lower generation, states local producers.

Jindal Power Ltd, the first domestic private sector player to commission an independent power plant (IPP) in 2007, has a total installed capacity of 3,400 MW set up at coal pitheads. This includes a 1,000 MW plant (250 MWx4) located at Raigarh district of Chhattisgarh, and another plant of 2,400 MW (600 MWx4) capacity, located at Tamnar in the same state.

What does it mean?

1. Billet and Ingot supply has reduced from this region giving some support to prices. Current offers are at INR 25,500-25,700/MT for MS Ingot and billet at INR 26,200-26,400/MT on ex-works basis (excluding 18% GST)

2. Sponge iron prices are under pressure and manufacturers are looking for alternative markets. Current offers for iron ore based sponge iron (C-DRI) at INR 17,000-17,200/MT and pellet based sponge iron (P-DRI) at INR 16,000-16,200/MT on ex-works basis.

Domestic billet prices as on 15 September 2017

Basic prices in INR/MT & excluding of GST @ 18%
Source: SteelMint Research