India: Chhattisgarh Electricity Board Removes Rebate on Tariff

Raipur (central India) based furnaces are likely to feel the heat as rebate on electricity tariff have been removed by Chhattisgarh State Electricity Regulatory Commission (CSERC). Furnaces production cost in Raipur are likely to increase over INR 1,000/MT (USD 13) with recent revision in power tariff.

Till Mar'20, the power tariff in Raipur for industrial consumption was at around INR 5.50/unit.

However in April bills, with removal of rebate of INR 0.80-0.90/unit, the revised tariff is reported about INR 6.30/unit and excluding load factor of about 15% & demand charges, it is over INR 7.00/unit.

As per industrialists, the plants were closed during April, hence the high production cost will be more painful in May bills, which will be payable in June.

-- Standalone furnaces & Hot Rolling mills (HRM) consume about 750-800 unit to produce a ton of Billets. While Rolling mills consumes around 100 unit & sponge iron producers 60-80 unit to make a ton of material.

So, the main pain will be for standalone furnaces & HRM as input cost is expected to surge by above INR 1,000/MT.

What May Happen ?

Sources believe that the large number of stand alone furnaces & HRM may postpone their plans of resuming operations. Earlier there was assumptions that about 90-95% steel mills may get functional by mid or end of May.

Spot steel prices in Raipur as on 11th May-

-- MS Ingot at INR 25,600-700/MT.
-- Billet at INR 26,200-300/MT.
-- Rebar (12-25mm) at INR 32,500-700/MT.
-- Sponge P-DRI at Rs 15,300/MT & DR-CLO at INR 17,200/MT.
Prices are ex-plant & excluding of taxes.

Raipur is the capital of Chhattisgarh state in central India and is known as a big hub of small & medium scale steel mills and is a key supplier of steel to all over India excluding eastern region.