By doing this, pig iron producers save up on at least 30 per cent of the cost of met coke which has been the only breather in terms of cost control. Prices of iron ore, the main raw material, have surged dramatically in the last one-and-a-half month.
Imported mainly from China, coke has gone up to Rs 22,000 a tonne from Rs 18,000 a tonne during the period while metallurgical coke of domestic origin is quoted at Rs 13,000-14,000 a tonne with 28 per cent ash content.
The benchmark variety with 22 per cent ash content metallurgical coke in India is sold at Rs 22,000 a tonne. The prices of iron ore have also spurted by 25 per cent in the last one month, affecting margins.
Thereby, independent pig iron producers have reduced their production capacity by half, despite huge build up of demand from steel producers.
