Government-controlled Rashtriya Ispat Nigam Limited’s (RINL’s) crude steel output for the month of April, 2022 was down by over 50% to 0.20 million tonnes (mnt) against 0.43 mnt seen in March.
Sources informed Steelmint that the PSU’s third furnace is still not running while the second is operating at around 50% capacity. RINL operates three furnaces under normal circumstances with a peak rated capacity of 7,150 tonnes per day (tpd).
However, the third BF has been out of service since end-January, mainly on account of coking coal issues.
When contacted, a company source informed that the third BF is still not running but the second is running, even if not at full capacity on some days.
It seems production is down and the company is being unable to operate at full capacity because of coking coal and power issues.
RINL buys some amount of coking coal from the spot market despite having long-term contracts. However, prices of the low vol HCC from Australia had ruled at a monthly average of $510/t CFR even after climbing down from $620/t CFR in the previous month.
That apart, the PSU does not own any coal blocks or captive power plants which has been impacting its production too, a company source said. It buys from the grid an assured quantum but has to pay higher for any amount drawn over and above this.
Market sources also hinted that RINL is facing funding issues at present, although this could not be confirmed from the company.
Sales down, inventory up
Sales in April also showed a 74% drop to 0.15 mnt against 0.55 mnt in the previous month. Since sales were down, the closing stock in end-March was up 47% to 0.54 mnt compared to 0.10 mnt in the previous month.
“Demand from the infrastructure segment was sluggish and April is always a dull month since frenzied buying happens towards the fiscal year-end from the projects segment,” said a company source.
RINL is the holding company of Vizag Steel Plant, India’s first shore-based. The government approved a plan earlier this year to privatise RINL.
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