Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian TMT maker Micky Metals has decided to defer its expansion project over high power tariffs in West Bengal. The steelmaker has sought government’s intervention to resolve the issue which has rendered the project unviable.


The State-run electricity board, West Bengal State Electricity Distribution Company Ltd (WBSEDCL) charges an average power tariff of Rs8/unit in Birbhum, where the expansion site is located. The electricity tariff in Durgapur under the DVC command area, however, is Rs4/unit. The additional tariff is increasing the overall input cost by 10pc, but margins remain below 5pc, according to a company official.


The company was to expand its billet-making facilities at the steel plant in Suri. The steelmaker is under the small-medium size manufacturers category with an annual capacity of 100,000mt with focus on sales within the State. In the next 6-10 months, however, the company is hopeful of expanding in Bihar, Jharkhand, Odisha, Assam, Uttar Pradesh, Rajasthan, Haryana, and Jammu & Kashmir.


If the power tariff is reduced, more companies could turn to producing steel Birbhum which an under-developed district.


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