India’s sponge iron industry is likely to post negative growth during the third quarter (October-December) of the fiscal year 2021-22 as the current shortage of coal in the domestic market persists, the Sponge Iron Manufacturers’ Association (SIMA) said in a statement on Monday, October 18.
“If the situation is allowed to continue and the coal shortage does not ease, then I am expecting that in the third quarter the growth will be negative," Deependra Kashiva, executive director, SIMA, said in the statement.
The SIMA official said that state-run Coal India Limited (CIL) which accounts for over 80 percent of domestic supplies has been directed by the government to only make supplies to thermal power plants during the ongoing fuel shortage, while sponge iron and cement producers are not getting any coal supplies.
Sponge iron ore direct reduction iron (DRI) units are operating plants using existing coal stocks and production is steadily coming down, he said.
According to the steel ministry data, Indian sponge production in the April-June quarter of the fiscal year 2021-22 was up 70 percent over the corresponding month of the previous fiscal year and, according to SIMA, growth is expected to be a low 10 percent in the July-September second quarter and to lapse into negative growth in the third quarter.