Indian steelmakers Tata Steel Limited and JSW Steel Limited have sought government intervention in mitigating disruptions in supply of propone gas impacting production of color-coated steel products, industry sources said on Tuesday, March 17.
Propane gas, crucial for zinc melting in the steel coating process, is a byproduct of natural gas processing and petroleum refining. Its shortage poses significant challenges for the India’s production of color-coated steel products in which companies have invested heavily, the sources said.
According to the sources, JSW Steel Limited conveyed to the government that disruptions to fuel supplies and maritime operations were starting to affect its operational stability and supply chain. As a result, JSW Steel Coated Products risks missing sales and supply obligations for tinplate under the government's production-linked incentive scheme and has requested a six-month extension. The company has received a force majeure notice from key suppliers like Petronet LNG owing to the war in the Middle East affecting shipments of liquefied natural gas (LNG).
India has already invoked emergency measures, restricting natural gas use to priority sectors, excluding steel, after liquefied natural gas shipments through the Strait of Hormuz were disrupted by the conflict.
Earlier this week, Jindal Stainless Limited said that its operations have been hit by the crunch in supplies of industrial gases.
“Due to the heavy dependence of stainless steel manufacturing on industrial gases such as propane and liquefied petroleum gas (LPG) and natural gas, several processes across our plants have been adversely impacted,” it said.