Rising gas prices hurting margins of Essar Steel, Torrent Power

Capacity utilisation to remain low on bullish gas price outlook

The uptick in global natural gas prices coupled with a bullish outlook for the commodity is worrying select
domestic steel and gas-based power units as capacity utilisation is dropping, resulting in bleak margin visibility going ahead. 

In the domestic steel sector, where most producers are running at 100 per cent capacity utilisation, the Ruias-owned Essar Steel is witnessing dwindling utilisation levels amid rising gas prices. The company has a 10 million tonne steel capacity, of which 70 per cent is gas-based. The company relies largely on imported gas to meet its requirement. 

The landed cost of gas for Essar Steel