Mounting gas shortages disrupt some steel plants at JSW, one unit may face shutdown

NEW DELHI: Mounting gas shortages have disrupted operations at some steel plants of India's top metals conglomerate JSW Group, with one unit facing a potential shutdown in the coming days, according to an internal note seen by Reuters.

India, the world's second-largest crude steel producer, is facing its worst gas crisis in decades ‌after the ⁠Middle ⁠East conflict disrupted supply routes.

JSW said in the note that disruptions to fuel supplies and maritime operations were starting to affect its operational stability and supply chain. As a result JSW Steel Coated Products risked missing sales and supply obligations for tinplate under the government's production-linked incentive scheme and has requested a six-month extension, it added.


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"JSW has also received ⁠force majeure ‌notice from one of its key suppliers - Petronet LNG Ltd owing to Middle East crisis affecting LNG shipment," the note ⁠said.

JSW did not immediately respond to a request for ​comment.

HUGE ADVERSE IMPACT

In a separate letter, also seen ​by Reuters, to the federal steel secretary dated March 7, the Indian Steel Association said a shortfall of propane and liquefied petroleum gas affected the entire value chain and would have a "huge adverse impact" on steel-based micro, small and medium enterprises and their ancillary units, which ‌employ a large workforce.

JSW Steel, Tata Steel and state-run Steel Authority of India are among the ISA's members.

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India has invoked ​emergency measures, ​restricting natural gas ⁠use to priority sectors after liquefied natural gas shipments through the Strait of Hormuz were disrupted by the conflict.

The ISA has asked the government to ​fast-track subsidised spot imports from non-Middle East sources and ensure priority allocation to steel and allied industrial clusters.

The steel association did not immediately respond to a request for comment.

India's small steel producers have warned of production halts because of gas shortages, Reuters reported last week.