Rising gas prices hurting Essar Steel, Torrent Power margins

While company officials declined to comment, they said volatility in gas prices was a challenge

The global rise in natural gas prices, coupled with a bullish outlook for the commodity, is causing worry among select domestic steel and gas-based power units, with capacity utilisation dropping.

Most steel producers are at 100 per cent capacity utilisation. The Ruias-owned Essar Steel is seeing dwindling utilisation amid rising gas prices. The company has a 10 million tonne annual capacity, of which 70 percent is gas-based; it relies largely on imported gas, whose landed cost for Essar has risen to $10.16 per mBtu, from $7.4 per mBtu in June. “This three-dollar rise translates into an additional cost of Rs 2,500