India’s state owned and largest steel grade merchant pig iron manufacturer is all set to restart its blast furnace post capital maintenance repair, which started in the month of December’17. Indian pig iron prices have increased by INR 2,000-3,000/MT (USD 30-46) in last 2 months. But with resumption of Neelachal’s blast furnace, pig iron supply is likely to improve and prices may correct from current levels.
Post the capital repair work, the blast furnace could run uninterruptedly for 15-20 years. Moreover, the steel plant could run at its full nameplate capacity of 1.1 million tonnes per annum (mtpa). Previously, the steel mill could run at barely 50 per cent of its installed capacity due to blast furnace constraints.
The revival of NINL’s plant operations is also bound to spell relief for the pig iron market. Historically, NINL has been one of the largest producers and exporters of the intermediate product. Other products in NINL’s portfolio are steel billets, LAM (low ash metallurgical) coke, nut coke, coke breeze, crude tar, ammonium sulphate and granulated slag.
With the steel scenario growing up, NINL has plans for the turnaround of the company. Also, with the completion of blast furnace capital repair, operationalisation of the 110 million tonne captive mines and full capacity utilization of the steel melting shop (SMS), NINL will have a potential future of becoming one of the leading producers of steel in the state. Apart from MMTC which owns 49.78 per cent equity in NINL, two Odisha government PSUs- Odisha Mining Corporation (OMC) and Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) have stakes in the steel project.
NINL which has a steel making facility in Odisha’s Kalinganagar is battling an acute financial crunch. The ailing steel firm has been incurring losses since 2012-13 and at the close of 2015-16, it had a steep loss of Rs 334.53 crore. NINL was sorely in need of equity support of Rs 300 crore to wriggle out of the financial crisis. Of the projected support, MMTC’s support was pegged at Rs 149.34 crore. Rest of the equity infusion was to flow from other shareholders- mainly state run mining company. MMTC’s equity infusion in NINL is subject to approval from the Ministry of Commerce & Industry, its parent ministry.
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