Vizag Steel incurs 5,000 MT of output loss/day on BF shut-down

The steel industry is facing tough times, not just in India but globally, on account of sluggish demand, over-supply and tight liquidity conditions. All the steel players in India, big and small are, consequently, feeling the heat.

Market sources said that Vizag Steel Plant (VSP) cut its hot metal production on subdued demand. And that the plant has shut down one of the blast furnace since the last 2-3 weeks on bearish market sentiments and high inventory levels.

It may be noted that Vizag Steel has three blast furnaces with an individual capacity of 2.4 MnT and total capacity of 7.4 MnT. The company produces around 4.5 MnT per annum of hot metal.

Sources also mentioned that VSP has extended the shut-down of its rolling mill which was under planned maintenance for the last one month, incurring a production loss of around 70,000 MT per month.

An RINL source, confirming the blast furnace shut-down, informed SteelMint that, “We have taken a scheduled maintenance of the blast furnace. Its resumption will take another 3-4 weeks.”

Asked about the production loss being incurred (because of the ‘planned’ shut-down), the source said: “Once you take a shut-down, naturally there will be a production loss. The production loss is around 5,000 metric tonnes (MT) per day. See, this scheduled maintenance has to take place after a certain period of operation.”

The source added that the rolling mill is also undergoing a planned maintenance shutdown.

Like many other players in the industry, VSP too is sitting on an inventory pile-up, which is of 6-6.5 lakh tonnes, in its case, the company source added.

“The steel industry is in the doldrums, not just RINL, the corporate entity of VSP, but all the steel players are feeling the heat. And, not just in India but across the world,” an industry source said.

It may be recalled, the largest public sector steel player, Steel Authority of India’s (SAIL’s) first-quarter (Q1) performance was subdued, with revenues sliding 6.8% year-on-year.

But the steel mills throw up their hands in despair. There is no infrastructure development, nor is there any real estate activity to write home about. Neither are new infrastructure projects coming up… Indeed, where do the steel mills sell their steel?