Sterlite's Tuticorin plant closure spiked sulphuric acid prices 4-fold in 6 mths: CEO
New Delhi: Sterlite Copper's Tuticorin plant closure has led to a spike in prices of phosphoric and sulphuric acids, adversely affecting the downstream chemical and fertilisers industry, a top company official said.
The Vedanta-owned company's unit in Tamil Nadu was closed in May this year following a government order.
"In the last six-months, prices of sulphuric acid have shot up from Rs 3000/tonne to Rs 12,000/tonne, a rise of 300 per cent (four fold), and a tonne of phosphoric acid costs Rs 53,000 as compared to Rs 43,000 a tonne six month earlier, a rise of 23 per cent," Sterlite Copper CEO P Ramnath said.
"The plant met 80-90 per cent of demand for sulphuric acid in the country and 15 per cent of the phosphoric acid demand. The closure of our plant has led to a sharp surge in demand, thereby driving up prices," Ramnath added.
He said the 4,00,000 tonne per annum plant, which met over 30 per cent of the of India's copper demand, produced sulphuric and phosphoric acids as a by-product which are key raw material for manufacturing of fertiliser.
The copper smelter was producing 1.2 million tonne (MT) of sulphuric acid per annum, half of this was sold on a commercial basis; and 2,30,000 tonne of phosphoric acid every year, Ramnath said.
The sharp rise in prices will surely affect the prices of fertilisers which will further affect the farmers as they are the primary consumers of fertilisers, he noted.
The government has set a target of doubling the farmers' income, but if the input cost remains high it will affect the profit margin, Ramnath said.
He said that the plant's closure is also hurting industries that use copper for manufacturing a wide variety of products.
"Due to the shutdown in the last six months... import of the metal has seen a surge. While premium on copper has gone up by 10-15 per cent, the import of the metal has shot up 2.5 times to nearly 30,000 tonne per month," he said.
The Tamil Nadu government had in May ordered permanent closure of Vedanta's Sterlite Copper unit in the state after 13 people, among protesters demanding its shutdown on environmental concerns, were killed in police firing.