Abhishek Law | New Delhi, June 5 |
Blast furnaces are typically used for hot metal production, and are a part of the steel-making process
State-run shore-based steel maker, Rashtriya Ispat Nigam Ltd (RINL) – which is a part of the Centre’s divestment targets – has been unable to make operational its third blast furnace at the Vishakapatnam plant first because of high coking coal price and additionally now because of sluggish demand impacting business plans.
The blast furnace has been idle since January, company officials told BusinessLine.
Blast furnaces are typically used for hot metal production, and are a part of the steel-making process.
The company’s capacity across the two operational blast furnaces – blast furnace 1 and 2 stand at 2.5 MT per annum of hot metal for each; while for the now idle blast furnace 3, it stands at 2.5 MT per annum.
According to company officials, the decision to keep the third blast furnace idle was a “business decision” considering coking coal prices continue to be on the higher side, in spot markets, and there was some sluggishness in demand for offerings at present. In Q4FY22 (January – Mar) coal prices had shot through the roof; while over the last few months, global recessionary trends impacted demand. In the domestic market, steel prices have fallen too.
Absence of captive coal blocks also means the steel-maker would have to buy power from grid.
The Navratna PSE is amongst the few steel-makers that does not have its own captive coal mines or iron-ore mines. It has been repeatedly asking state governments in Odisha, Chhattisgarh and Andhra Pradesh for granting iron ore blocks on nomination basis. It has also been participating in allocation of iron ore mines through the e-auction route.
RINL’s Chairman and Managing Director, Atul Bhatt, did not respond to queries from BusinessLine.
For FY22, RINL, the holding company of Vizag Steel, reported a profit before tax of Rs 835 crore – its first after a gap of six years; while production stood at 5.77 million tonnes (MT) of hot metal; 5.52 MT of liquid steel; 5.27 MT of crude steel and 5.14 MT of salebale steel.
Installed capacity at the plant is around 7.5 MTPA.
Turnover for FY22 stood at Rs 28,082 crore, up 56 per cent y-o-y. Exports witnessed a 37 per cent jump y-o-y to Rs 5607 crore.