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Mounting gas shortages have disrupted operations at some steel plants of India's top metals conglomerate JSW Group, with one unit facing a potential shutdown in the coming days, according to an internal note seen by Reuters. India, the world's second-largest crude steel producer, is facing its worst gas crisis in decades after the Middle East conflict disrupted supply routes.
JSW said in the note that disruptions to fuel supplies and maritime operations were starting to affect its operational stability and supply chain. As a result JSW Steel Coated Products risked missing sales and supply obligations for tinplate under the government's production-linked incentive scheme and has requested a six-month extension, it added.
"JSW has also received force majeure notice from one of its key suppliers - Petronet LNG Ltd owing to Middle East crisis affecting LNG shipment," the note said.
JSW did not immediately respond to a request for comment.
HUGE ADVERSE IMPACT
In a separate letter, also seen by Reuters, to the federal steel secretary dated March 7, the Indian Steel Association said a shortfall of propane and liquefied petroleum gas affected the entire value chain and would have a "huge adverse impact" on steel-based micro, small and medium enterprises and their ancillary units, which employ a large workforce.
JSW Steel, Tata Steel and state-run Steel Authority of India are among the ISA's members.
India has invoked emergency measures, restricting natural gas use to priority sectors after liquefied natural gas shipments through the Strait of Hormuz were disrupted by the conflict.
The ISA has asked the government to fast-track subsidised spot imports from non-Middle East sources and ensure priority allocation to steel and allied industrial clusters.
The steel association did not immediately respond to a request for comment. India's small steel producers have warned of production halts because of gas shortages, Reuters reported last week.
(Reporting by Neha Arora; editing by Mayank Bhardwaj, Kirsten Donovan)
