India’s steel industry is facing growing operational disruptions due to a shortage of industrial gases, including LNG, LPG and propane, amid supply disruptions linked to the ongoing West Asia conflict, according to media reports. The situation has tightened fuel availability for steelmaking processes and raised concerns over potential production cuts.
The disruption has largely been attributed to shipping constraints through the Strait of Hormuz, a key route for India’s energy imports. As a result, several steel plants have reported operational instability, with some units facing the risk of temporary shutdowns after suppliers issued force majeure notices due to disrupted LNG shipments.
The shortage is particularly affecting coated steel production, where propane is used for heating in zinc melting during the coating process. Industry players including JSW Steel and Tata Steel have reportedly sought government intervention to address supply constraints and ensure propane availability for coated steel units.
While large steel producers typically maintain 20-25 days of propane reserves, the situation is more critical for micro, small and medium enterprises (MSMEs), which often lack sufficient inventories. Several smaller producers have warned of possible production halts, as available industrial gas supplies are increasingly being diverted to prioritize residential cooking demand.
Industry bodies cautioned that prolonged disruptions in industrial gas supply could reduce steel production, increase costs and strain the supply chain, prompting calls for policy support to stabilize fuel availability for the sector.
