JSPL Eyes Higher Steel Prices, Driven by Severe Coal Shortage

SEATTLE (Scrap Monster): Leading steelmaker Jindal Steel and Power Limited (JSPL) anticipates that steel prices will see further surge in the forthcoming months, mainly due to shortage of coal, which is primarily used by domestic steelmakers to generate power to run the steel plants.

According to V.R. Sharma, Managing Director, JSPL, the coal prices have nearly tripled over the previous month. The prices per tonne of coal have skyrocketed from INR 4,000-6,000 a month before to INR 8,000-12,000. The shortage of coal has had an impact on steel prices. As the shortage is expected to worsen further, this will get reflected in steel prices going forward, he noted.

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As per estimates, the country consumes around 1,200 million tonnes of thermal coal per annum. The steel industry alone consumes nearly 150 million tonnes of coal every year. The production by the state-owned Coal India Limited (CIL) comes to only 800 million tonnes, indicating a shortage of nearly 400 tonnes. The domestic steel industry depends on CIL for almost 80% of their coal requirement.

JSPL highlighted the need for CIL to boost its production to at least 100 million tonnes per month so as to fully meet the country’s total coal demand. The boosted production will not only provide stability to prices, but also reduces reliance on imported coal.