Indian steelmakers Tata Steel limited and JSW Steel limited have sought government intervention to address propane gas supply disruptions affecting the production of color-coated steel products, industry sources said on Tuesday, March 17.
Propane gas, critical to melting zinc during the steel coating process, is a by-product of natural gas processing and petroleum refining. The shortage is posing serious challenges to the production of color coated steel products in India, in which companies have invested heavily, sources said.
According to sources, JSW Steel limited has told the government that disruptions in fuel supply and maritime operations are starting to impact its operational stability and supply chain. As a result, JSW Steel Coated Products is at risk of failing to meet its tinplate sales and supply obligations under the government's production incentive scheme and has sought a six-month extension. The company has received force majeure notices from key suppliers such as Petronet LNG due to the war in the Middle East affecting liquefied natural gas (LNG) supplies.
India has already introduced emergency measures limiting the use of natural gas to priority sectors excluding steel, after supplies of liquefied natural gas through the Strait of Hormuz were disrupted interrupted by the conflict. Earlier this week, Jindal Sustainable limited said its operations were affected by disruptions in the supply of industrial gases.
“Due to the heavy dependence of stainless steel production on industrial gases such as propane, liquefied petroleum gas (LPG) and natural gas, some processes at our plants were affected,” it said.
