Domestic steel industry showing signs of recovery as demand picks: RINL CMD

The Indian steel market, which was hit by the COVID-19 pandemic and subsequent lockdowns, has started showing signs of recovery, RINL Chairman P K Rath has said.

The pandemic had severely disrupted the steel sector in the first quarter of the ongoing fiscal, particularly in April. However, there is a recovery visible in the market with pick up in demand, Rath said.

"As the process of unlocking started from June onwards in a phased manner, activities in construction and various projects have picked up and the demand in the domestic steel market has surged. Further with the ensuing festive season the demand for white goods and auto-sector will also further spur the steel market," Rath told PTI in an interview.

Besides, the government initiative on multimodal infrastructure projects like Bharatmala, Sagarmala and Dedicated Freight Corridors in the logistic sector will also help the steel industry.

Due to the bad market conditions developed post outbreak of the virus, steel makers were forced to cut down their operations by up to 50 per cent in April. The players also had to turn to exports to find markets for their produce.

However, with the relaxation in lockdown norms, the players started ramping up their production levels in a phased manner.

Rath said with an improving market, major steel players have ramped up their production capacity. RINL's production level would also return to 100 per cent with the resumption of the third blast furnace on Sunday.

There are three blast furnaces of 2.5 MTPA each at the company's plant in Visakhapatnam.

Replying to a question related to the challenges RINL faced in maintaining its operations, the CMD replied the government issued various guidelines from time to time to prevent the spread of disease.

Deployments of manpower at the workplace was advised to restrict to 50 per cent "which mandated us to cut down production level by 2/3rd by putting down two out of three blast furnaces for safety of the plant operation and our people," he said.

The demand had fallen to its lowest level, on the other hand the rising inventory was cause of concern as the cash flow got throttled. However RINL could manage its business operation by exploring overseas markets and exported to the Middle East, South East Asian countries including China at competitive prices and got over cash flow challenges.

The company also supplied for the recently inaugurated mega project Atal Tunnel, he said. In Atal Tunnel, which was recently inaugurated by Prime Minister Narendra Modi, RINL has supplied around 8,500 tonnes of TMT.

Rath said, "We are committed and continue to strive to meet the steel requirement of the nation. In the past also we have contributed steel for major projects of national importance like Statue of Unity, Metro Rail projects in Delhi, Bangalore, Nagpur, Hyderabad, also various Airports in Chennai, Andaman, HPCL Refinery, various Smart Cities, Polavaram National Irrigation Project etc."

RINL, under the steel ministry, produces special steel, including wire rod coils, rounds, billets of different grades and dimensions.