With tight supplies and higher prices, India's small-scale sponge iron units will affect the overall steel output in the short term.
As per officials of Orissa Sponge Iron Manufacturers' Association (Osima), this represents about 88 sponge iron plants in eastern Orissa state, most of the (sponge iron) plants have cut output by 50-60 per cent due to which the situation is acute now as most of the stocks have got exhausted.
There are 400 sponge iron plants spread across central, western and southern regions in the country that produce about 21 million tonne of the material, a major chunk of this is used by secondary steel producers as raw material.