India: Rashtriya Ispat Nigam Sees Rise in Inventory by Around 50% - Sources

Rashtriya Ispat Nigam Limited, the corporate entity of Vizag Steel Plant (VSP) is feeling the heat of COVID-19 with inventory levels of 5-6 lakh tonnes piled up, SteelMint learnt from sources.

The PSU was operating in a bleak market scenario, in any case, like all other steel producers, prior to the outbreak of the pandemic, with inventory levels of 2-3 lakh tonnes. But, from the new calendar, the industry was bracing for the upcycle to set in. However, the COVID-19 outbreak has changed the situation, it seems.

"Inventory levels at RINL have increased to 5-6 lakh tonnes from the previous 3-4 lakh tonnes since the start of COVID-19. There is just no demand," a source informed.

Production reduced

Production of hot metal has also been reduced to 40-45%. Of RINL's three blast furnaces (BFs), one has been totally shut down since a fortnight. Consequently, production, which used to be at around 20,000 tonnes per day (TPD) of hot metal from the three BFs, has now been reduced to around 10,000 TPD from its two remaining BFs, sources informed.

However, the source informed that RINL is ready to increase production gradually once normalcy returns.

It may be noted that VSP's total saleable steel production was about 500,000 tonnes (MT) per month out of which the rebar component was around 160,000 MT.

It may also be recalled, out of the three BFs, one had been put in shutdown mode in September 2019 too, "considering the unfavourable price and inventory levels" at that time. However, sources had then said that the other two BFs had been put to a higher operating regime and the volume drop had been limited to about 13% at that juncture. The source had further said that plans had been afoot to restart the shut BF in a month's time with an improvement in price and inventory levels.

Workforce reduced

The source also informed that with several coronavirus cases detected in Andhra Pradesh, the situation may take time to become regular. At the time of writing the story, the total infected cases were at 420.

RINL is operating with a 40% reduced work force as well.

~By Madhumita Mookerji