India: RINL gets active in procuring coking coal. Will 3rd BF resume soon?

Rashtriya Ispat Nigam Limited (RINL), the holding company of Vizag Steel Plant (VSP), has completed two ships’ payments recently for delivery of around 1.5 lakh tonnes of coking coal. The consignments of 75,000-80,000 tonnes of two Panamax vessels are slated to arrive from Australia early and mid-July, it is learnt.

This delivery is part of RINL’s “regular bookings”.

RINL, like other mills, also faced the brunt of the double whammy of record high prices of coking coal — when the Russia-Ukraine war started end-February, and an overall lacklustre market for steel.

It may be recalled that the Australian premium HCC grade had touched a record $590/t FOB last March, which also led to payment issues for the fuel for the last 2-3 months at RINL. But, with the payments for two vessels done, shipments are set to resume with coal loading expected to start shortly. The two consignments will likely arrive by mid-July.

Will the third BF resume soon?

Based on this development, it can be expected that perhaps RINL could soon resume its third blast furnace, which has been stalled since end-January.

The BF could resume from August, if market conditions are feasible, sources informed SteelMint.

It may be mentioned, RINL’s total crude steel capacity from its three blast furnaces is at around 7.3 mnt per annum and 7.5 mntpa of hot metal. BF 1 and BF 2 have a capacity of 3,200 cubic meters (each BF can produce 6,000 to 6,500 mt of hot metal per day) and BF 3 has a capacity of 3,800 cubic meters and can produce 6,500 to 7,000 mt of hot metal per day. The BF 3 is closed for quite some time.

Outlook

Some more coking coal consignments from “other sources” are in the pipeline at RINL. These are expected to be delivered end-July, early August, reliable sources informed SteelMint.

The PSU required around 6 mnt of coking coal in financial year 2021-22 (FY22). However, it is difficult to say how much the company would require in FY23 since its third BF has been out of operation for almost six months now. Once the third BF resumes, RINL could revert to its former production volume of more than 500,000 tonnes against current levels.