(MENAFN- KNN India) New Delhi, May 9 (KNN) India is grappling with an acute shortage of cold rolled grain-oriented (CRGO) steel, a crucial material used in the production of distribution and power transformers that are essential components of the country's power grid infrastructure.
This critical material faces a shortage is created because of mandatory requirement of BIS standard and absence of any domestic manufacturing capacity until the year 2027.
The crunch in CRGO steel supply has been exacerbated by the non-renewal or expiration of export licenses granted by the Bureau of Indian Standards (BIS) to major exporters from China.
As a result, several Chinese manufacturers have been forced to halt exports to the Indian market, significantly compromising the flow of CRGO steel imports into the country.
With the absence of major players in the market, the prices of CRGO steel are anticipated to surge, reflecting the acute shortage gripping the industry. India has traditionally sourced CRGO steel from nations including China, South Korea, Japan, and various European countries, with all imports subject to compliance with IS 3024 (2006) of the Bureau of Indian Standards (BIS) regulations.
“Annual demand is of CRGO in India is 325000 tons of which conventional grade is approximately 100-125 KN and balance is Hi- B Grade.
The transformer industry is facing acute shortage of HiB grade. World capacity of CRGO is 30 lac tons of which 45% is accounted for by China.
There is need to allow Chinese mills namely Bao, Wisco and Shougang to ease supplies”, according to a largest user industry.
While a handful of smaller Japanese and European mills remain as alternative sources, their limited capacity falls short of meeting India's demand, further exacerbating concerns over the looming supply crunch.
These transformers, using CRGO steel, are predominantly procured by government entities and distribution companies (DISCOMs) for the energy sector.
In a bid to address this issue, JSW Steel Ltd announced in February the formation of a 50:50 joint venture with Japanese steel manufacturer JFE Steel Corporation to establish domestic production of grain-oriented electrical steel in India.
The new company, named JSW JFE Electrical Steel Private Limited, will have a manufacturing base in Karnataka and a planned investment of Rs 5,500 crore.
However, the facility is not expected to commence production until fiscal year 2027, leaving India without domestic manufacturing capacity for CRGO steel until then.
Facing this challenging scenario, the industry is appealing for the allowance of CRGO steel imports from China to address the pressing issue and stabilise the supply chain for this critical material in India until domestic production capabilities are established.
(KNN Bureau)
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