Increase in coal prices puts pressure on Indian steel industry
Coal
India (CIL) has recently decided to increase coal prices by an average of 16.6%. The decision of CIL now creates concern among steel producers in
India as it will lead to increase in cost of steel
production by Rupees 250-300 per ton ($5.5-6.5). The exact prices have not been revealed yet.
The price increase will not affect
Jindal Steel & Power, Monnet Ispat and Tata Sponge & Iron as they have their own mines however it will have an impact on steel industry in general.
50-60% of the cost increase will be reflected to
sponge iron plants and the rest will be reflected to the customers.
It is reported that five major hot rolled coil producers in
India; Steel Authority of
India Ltd (
SAIL), Tata Iron and Steel Corp (TISCO), Ispat Industries, Essar Steel and
Jindal Vijaynagar have recently demanded government to restore previous coal prices as steel industry will be negatively impacted from the increase in coal prices.