India's Andhra Pradesh producers to cut output by 30% as power consumption curbs

Ferroalloy producers in Andhra Pradesh, India, have been forced to drastically reduce capacity utilization due to power supply shortages. Mills are hoping to raise prices and restore profitability amid falling supply, but there is no guarantee buyers will accept the price increases.
The Andhra Pradesh Central Power Distribution Board issued a decree that from September 2 to 15, the power supply of industrial enterprises in the state will be reduced by 30%. The average electricity price in Andhra Pradesh was INR 7.32 ($0.088/kWh) per kWh in August and the picture is expected to be even bleaker in September. Currently during the peak load period (18:00 to 07:00), the electricity price is already INR 10 per kWh (0.12 USD/kWh).
Under the current circumstances, local ferroalloy enterprises without their own power sources are forced to reduce capacity utilization accordingly.
Due to the decline in production, some producers immediately raised their quotations for silicomanganese (65%Mn; 16%Si) to US$1,000/ton FOB (up US$75 week-on-week) and alloys (60%Mn; 14%Si) to US$880 FOB (up $35). Meanwhile, some suppliers have decided to temporarily withdraw from the market until the situation becomes clearer.
For more information on ferroalloy price trends and market conditions, please contact Hainan West Asia Group.

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