In a concerning development for the energy sector, the supply of Cold Rolled Grain Oriented (CRGO) Steel, pivotal in the production of distribution and power transformers, faces a critical shortage in India.
With the absence of major players in the market, the prices of CRGO Steel are anticipated to surge, reflecting the acute shortage gripping the industry, an industry insider said, on the condition of anonymity.
CRGO Steel, predominantly sourced from nations including China, Korea, Japan, and various European countries, is subject to IS 3024 (2006) of Bureau of Indian Standards (BIS) regulations.
One of the primary factors contributing to the supply crunch is the non-renewal or expiration of export licenses granted by the Bureau of Indian Standards (BIS).
Various exporters from China and Korea found themselves in a precarious situation last year when their application for license renewal was rejected by BIS, forcing an immediate halt in exports to the Indian market.
Compounding the predicament, another prominent Chinese mill is grappling with uncertainties as the expiration of its license looms, potentially causing further disruptions in the supply of CRGO Steel to India.
Moreover, a key Chinese exporter has found itself on the receiving end of a stop marking order from BIS, stemming from non-compliance with the prescribed Indian standards.
Consequently, the flow of CRGO Steel imports into India has been significantly compromised, leaving only a handful of smaller Japanese and European mills as alternative sources. However, their limited capacity falls short of meeting India’s demand, exacerbating concerns of a looming supply crunch.
Urgent corrective actions are imperative to address this pressing issue and stabilise the supply chain for CRGO Steel in India.