The effect of the declining coal stock in the country has started showing on the aluminum and steel industry. Coal production has fallen significantly. Recently, the Power Minister had said that only four days’ stock of coal is left in the country. Imported coal has also become very expensive. Due to this, the manufacturing sector has suddenly been caught in a deep crisis.
The plight of the steel and aluminum industry
The Federation of Indian Mineral Industries, in its letter to the Ministry of Coal, has said that the steel and aluminum industry is suffering due to the short supply of coal. Due to the shortage of coal, the industries working on private power plants and small and medium industries are on the verge of closure. The cost burden on the products being made is very high. This burden is now being passed on to the consumers. Due to this, the possibility of everything becoming expensive has increased.
Aluminum is used in making FMCG products, pharmaceuticals and vehicles. According to the companies associated with the steel industry, one is very less coal is available. Even if available, its price has gone up to 2.80 per mega/cal, which is usually 0.70 mega/cal. According to industry sources, the price of domestic sponge iron has now reached Rs 36,000 per tonne. It was Rs 27,000 a tonne three months ago and Rs 22,000 a tonne six months ago.
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Half the supply of coal in aluminum, cement and steel industries
Coal India is able to supply only half of their requirement to non-power sectors like aluminium, cement and steel. The supply of coal rakes has now come down from 50 to 25 per day. This is the situation for the last two months. Therefore, now only a day or two of coal is left in the plants of aluminum, cement and steel industries. According to cement industry sources, the price of coal has more than doubled in the last three months. The way the cost is increasing, its prices may increase significantly in the coming days.