VSP to cut output due to shortage of raw materials

Visakhapatnam Steel Plant (VSP) has decided to cut production owing to a shortage of raw materials, mainly coking coal and metallurgical coke.

"Although we are facing a raw material crunch for the last four months, VSP has been maintaining its production level until now. However, the shortage of imported coking coal has necessitated VSP to regulate its coke production with the available coke. As a result, the coke oven pushings may come down from the present level of 260 per day to 220 per day, which will affect the hot metal production by around one lakh tonnes per month," VSP sources said in a press release.

"Further, the international coke market has become very volatile due to the closure of coal mines in China and subsequent reduction of coke export. As a result, the scarcity of coke has increased and the prices have skyrocketed to around $500 from a level of $64 per tonne two years ago," the release added.

VSP has been trying to source coal and coke from the US, Canada and Ukraine, but without much success. VSP, therefore, has no option but to curtail its production till the coal supplies become normal and in the meantime the company has requested Coal India and TISCO to augment its coal supplies so that VSP can maintain reasonable production level, the release said.