Andhra’s power shortage takes toll on steelmakers

Tags: News
About 15 ferro alloy and secondary steelmakers are thinking of stopping production or cutting down operations due to increased power bills in the back of fuel surcharge adjustment charges by the power utility in Andhra Pradesh.

Andhra’s 31 ferro alloy units account for 30 per cent of India’s production for the raw material for the steel industry. Four of them have already shut their facilities in the state.

Power accounted for 40-70 per cent of the cost of production, said MR Prasad, secretary general of AP Ferro Alloys Producers Association.

The units in Andhra Pradesh were producing about 2.5 lakh tonne material worth Rs 1,500 crore annually. They consumed about 4,000 kwh power per tonne for ferro chrome and silico manganese and 9,000 kwh for ferro silicon.

The AP government has imposed a FSA of Rs 1.32 per unit, which is being added to the current tariff of Rs 3.65 per unit. FSA is the difference between the cost of service approved in tariff order and actual cost incurred.

According to government, the actual cost of service has been Rs 4.94 per kwh for 2011-12, Rs 4.43 for 2010-11, Rs 4.09 for 2009-10 and Rs 4.26 per kwh for 2008-09.

An increase in price by Re 1 per unit would increase the cost of production by about Rs 4,000 a tonne for ferro chrome and ferro manganese and Rs 9,000 a tonne for ferro silicon, he said. There are about 200 secondary steel producers in the state and they are facing the same problem.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Need to rein in profligate promoters in low margin airline business

    With the media and industry searchlight trained hard on SpiceJet, it is easy to forget that it may be, at worst, a symptom, not the real malaise itsel

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

Shifting sands in the Far East

As was to be expected, Japanese prime minister Shinzo Abe ...

Zehra Naqvi

When humanity died, bestiality prevailed

The terrorist attack that killed 132 children in Peshawar has ...

Bubbles Sabharwal

Why self-esteem must be your best friend forever

Two negatives do make a positive! Imagine no doubts, no ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture