By Madhumita Mookerji
India’s state-owned, Rashtriya Ispat Nigam Limited (RINL) restarted the first of its two closed blast furnaces (BFs) on July 17, 2020. The furnace is expected to reach its full rated capacity of 7,000-7,500 t per day in 10 days to two week’s time, a company source informed SteelMint.
With the full ramp-up of the second BF, RINL’s hot metal production can now touch on average 13,000-14,000 t per day, going forward.
Vizag Steel Plant (VSP), whose holding company is RINL, has three BFs, each with a rated the capacity of 7,500 t per day (tpd) and around 2.5 million tonnes (mn t) per annum (total 7.5 mn t), but which can vary on account of shutdowns, maintenance etc. For instance, in the pre-COVID-19 era, RINL had even touched up to 18,000 tonnes per day in a few days.
Since the outbreak of the pandemic, the plant had initially shut down one BF since demand had almost gone out of the market. On April 13, it had to suspend operations in the second BF as well 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.
The BF had been closed for four months and so the production will have to be ramped up gradually with maybe an initial 500 tonnes followed by another 1,000 tonnes and gradually the full capacity of up to 7,000-7,500 tpd will be reached in a week’s time, for certain, it is learnt.
Moreover, usually there are certain technical procedures that have to be followed before the metal can be drawn from a furnace, like connecting the taphole to the tuyere etc before the metal can be drawn within 36-72 hours.
However, the rated production can often be controlled keeping in mind the downstream and overall market scenarios.
Thrust on exports
Demand is creeping up in the domestic market but RINL’s thrust will continue to be on exports of semi-finished products in July. Its sales target for the current month is 3.5 lakh tonnes of steel. “But the thrust is on exports of semi-finished products,” the source informed.
In June, 2020, the company had notched up sales of 2.9 lakh tonnes, of which 1.2 lakh tonnes comprised exports. The steel PSU had actually targeted sales of 2.5 lakh tonnes in the domestic market alone in June, 2020. Thus, it fell a little short of achieving that target, at 1.7 lakh tonnes. But, going forward, RINL is upbeat that the demand scenario would become better.
It is natural that the thrust for most mills will continue to be on exports at the moment against the backdrop of demand that is slowly creeping up because they need working capital. Whatever they are investing in raw material at present cannot get blocked. There has to be a flow in the working capital. And since the mills will have to continue with production, the need for working capital is imperative since payments to suppliers will have to be made.
As said an industry insider, “If the product doesn’t move, where will the next lot of material come from? Thus, the thrust on exports will continue for some time to bring in the cash.”