JSPL: Expensive Crude Oil Makes Raw Materials Costlier for Steel Industry

SEATTLE (Scrap Monster): According to V R Sharma, Managing Director, Jindal Steel and Power Limited (JSPL), the rising crude oil prices, amidst the Russia-Ukraine conflict, have led to significant jump in prices of raw materials for the steel industry. Furthermore, he emphasized the need to control energy prices across the globe.

The top industry executive termed the ongoing crisis between the two countries as an unfortunate situation. He observed that some oil companies are seen taking advantage of the situation. The oil prices, which were trading at around $90 per barrel, have now shot up to $120 per barrel. As per projections, the prices are likely to touch levels of even $180 per barrel over the next few days.

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The rise in oil prices have resulted in notable jump in freight rates of cargo ships. The rates, currently at around $20,000 per day, are feared to touch $30,000 per day. The coking coal prices have witnessed surge from levels of $250 per tonne before the crisis to levels as high as $550 per tonne. Also, iron ore prices too have moved up significantly. The jump in prices of steelmaking raw materials has led to elevated steel production costs in the country, Sharma noted.

It must be noted that domestic steelmakers have already hiked the prices of HRC and TMT bars by up to INR 5,000 per tonne.