Rashtriya Ispat Nigam Limited (RINL), the holding company of Visakhapatnam Steel Plant (VSP), which is operating at a mere 33% capacity through just one blast furnace (BF) at present, is looking to resume both its shut-down BFs as soon as opportunities open up post-lockdown, SteelMint has learnt.
In an exclusive interview, P.K. Rath, RINL’s Chairman-cum-Managing Director, said the steel PSU was looking to resume one of the idled BFs in the month of July, and seeing market demand, it will go for the full rated capacity from August. Thus, the second shuttered BF would also be pressed into service from August. Rath informed that it takes three weeks for a blast furnace to stabilise and therefore time will not be an issue here. In fact, he reminded that RINL has a history of quick ramp-up of idled furnaces. In September 2019, it had idled one furnace due to sluggishness in the domestic market but could revive the same within 15 days.
Rath further said that demand depression often necessitates furnace shut-downs.
He emphasised: “Today the construction and automobile sectors are only just trying to get back on their feet after the prolonged shutdown and contraction in macro-economic growth, demand and purchasing power. Incidentally, these two sectors account for 65-70% of the county’s overall demand for steel. So, even if one of these two sectors revives thanks to the government’s stimulus packages, and if demand bounces back, RINL will definitely restart operations in one of the two idled furnaces in July. Then we will see how the market trends and then gradually look to restarting the second BF. Ramp-up time is 15-odd days. We have experience of ramping up furnaces within 15 days to three weeks.”
VSP has three BFs, each with a capacity of 7.5 lakh tonnes. Since the outbreak of the pandemic, the plant had initially shut down one BF since demand had almost evaporated from the market. On April 13, it had to suspend operations in the second BF as domestic sales had almost touched rock-bottom and the inventory pile-up at that time was 7-7.5 lakh tonnes of steel at the plant.
Inventory
As far as inventory is concerned, RINL is observing a slow and gradual surge in the market and Rath feels that “domestic demand has started to re-appear”. Thus, the company liquidated some amount of stock. From an inventory of 7.5 lakh tonnes at the beginning of this fiscal year of 2020-21, RINL was able to liquidate about 1.5 lakh tonnes in the domestic market in May and consequently reducing the inventory to 6 lakh tonnes in June.
Production
Production per day in the month of May was 5,700 tonnes but with domestic demand slowly starting to rebound, RINL increased output to 6,500 tonnes per day in June. In normal circumstances, production per day is usually around 18,000 tpd from the three BFS. However, as already mentioned, RINL is operating at 33% capacity at present.
Sales
In April, RINL sold 2 lakh tonnes of saleable steel and 3 lakh tonnes in May –1.5 lakh in exports and 1.5 lakh domestically. “Production was hardly 1 lakh tonnes in April but in May we produced around 1.8 lakh tonnes of saleable steel,” Said Rath.
~By Madhumita Mookerji
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