Production of both crude and liquid steel at Rashtriya Ispat Nigam Limited (RINL) took a hit in May’21 on a month-on-month (m-o-m) basis, as per information available with SteelMint.
The PSU steel major’s crude steel production in May’21 dropped almost -17% m-o-m to around 3.9 lakh tonnes against 4.7 lakh tonnes in Apr’21. Liquid steel production, at 4.7 lakh tonnes (4.9 lakh tonnes in Apr’21), took a lesser hit of around -4% m-o-m.
Year-on-year, the May’21 crude steel production at RINL, the holding company of Vizag Steel Plant, was almost up 140% because May’20 was a bad month for steel when the country was in the grip of a severe national lockdown with demand down to almost nil.
“VSP’s average hot metal production would be 17,000-17,500 tonnes per day at present, down from the May’21 daily production volumes of 18,000-19,000 tpd,” a source informed SteelMint.
Sales
Total sales of RINL in May’21 were down by around 17% to 3.34 lakh tonnes against 4.03 lakh tonnes seen in Apr’21.
“Not only has VSP suffered a drop in production, restrictions on the customer-side too have impacted sales,” said the source. Overall demand for long products has been sluggish because of stalled construction projects.
Exports too were down a considerable 28% in the month under review at 1.05 lakh tonnes against 1.47 lakh tonnes in Apr’21. Vessel availability is an issue which is impacting export sales of steel mills. Few foreign vessels want to touch Indian ports at present because of the Covid-19 second wave sweeping India.
Inventory
The stocks were also up by 25% m-o-m at nearly 3 lakh tonnes in May’21 compared to 2.4 lakh tonnes in the previous month. Sluggish demand and sales have led to a rise in inventory.
Reasons for the drop in production
Business hours in Vizag, where the plant is located, have been reduced from to 6 am to 12 noon. Therefore, movement of goods has been hampered.
Labour is scarce because of rising Covid infections and lockdowns. Therefore, loading and unloading of materials is being impacted, the source informed.
Manpower shortage at the plant, safety protocols and reduced work hours are all leading to a slowing down of the production process.
Outlook
There will definitely be an overall impact on production and sales till lockdowns are gradually lifted across states. June may bring some cheer, provided the pandemic ebbs in tandem with the vaccination drive.
Madhumita Mookerji
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