According to the report, the State-owned Steel Authority of India Ltd. has reduced its production by up to 10% in the midst of supplies affected by the ongoing shutdown to tackle the coronavirus crisis.
Development comes days after the steel ministry has directed its public sector undertakings, including SAIL, not to reduce production. SAIL, which has an installed capacity of more than 21 million tonnes a year, produces approximately 50,000 tonnes of hot metal and 48,000 tonnes of crude steel per day.
"The company has reduced its output by 7-10 percent," the source said, adding that the decision had been made provided that the supply had been impacted by the lockdown. The source said that the company faces difficulties in acquiring the raw materials as well as in dispatching the goods by rail and road."
"Transportation of raw materials is affected. Even if we continue manufacturing, then where to sell the output? Everything is closed. Under the present situation, we can't just pile up stocks, "the source said requesting for anonymity.
Steel Secretary Binoy Kumar chaired a video-conferencing meeting on Monday, attended by senior officials from state-owned steel manufacturers such as SAIL, Rashtriya Ispat Nigam Ltd., NMDC Ltd., MOIL, KIOCL Ltd., and others. During the meeting, the official asked the PSUs, when examining the preparedness of their plants and units following the coronavirus outbreak, to continue operating as normal and not reduce the production levels.
SAIL and other PSUs also told the ministry during the current lockdown about the problems faced by their officials. The source said it is very important for steel plants to keep the vital equipment such as coke oven batteries, blast furnaces, etc in running condition.
A blast furnace at stainless steel plants is a large structure about 30 meters high. It is filled with refractory firebricks capable of withstanding temperatures up to 2,000 celsius. When halted, it takes a steel producer several months to rebuild the vital cycle of steel making.
The source further stated that "SAIL is facing challenges in the movement of essential items required for the production, clearance, and handling of ports, the movement of employees and workers. It is also facing difficulties in offloading materials from rakes at sidings. As a result, manufacturing is also substantially affected." However, many of the above issues are being resolved over time and the company is monitoring the emerging situations continuously concerning the availability and supply of raw materials, production, and dispatch.