Industry Update Back
Metals: Upgrading earnings for Coal India led by big price hike
09-Jan-2018

The price hike is likely to increase average cost of power generation by 7paise/kwh. For independent power generators, the increase in cost is largely pass-through to the power distribution companies (discoms), but non-power sector consumers like metal and cement producers will have to absorb the cost increase. Aluminum smelters will be worst hit because the production process is highly energy-intensive at 14,000kwh/t compared to other metals – for example, 500kwh/t for BoF-based steel making, 1,000kwh/t for EAF-based steel making, and 3,000-4,000kwh/t for zinc/copper/ferro-alloy production. Secondary steel producers can easily absorb the cost increase as they are benefiting from the steep steel price increase.