Coronavirus outbreak and lockdown impact weighs on steel industry in India

business-standard.com Production & Sales,  International 2020-03-26 09:15:47

The outbreak of COVID-19 and a lockdown to prevent the spread are threatening to impact production of steel companies.


Tata Steel is closing down its downstream standalone units in Maharashtra and Uttar Pradesh in line with guidance from respective states. The main sites at Jamshedpur, Kaliganagar and Angul, however, are operational, as they are process plants and hence have permission from local authorities, said sources.


One of India's largest steel makers, Tata Steel's consolidated crude steel production capacity is at 19.6 million tonnes, with manufacturing facilities in Jamshedpur in Jharkhand, Kalinganagar and Dhenkanal in Odisha, Sahibabad in Uttar Pradesh and Khopoli in Maharashtra.


Apart from curbs on manufacturing units, the clampdown on logistics was taking a toll on operations.


A spokesperson for ArcelorMittal Nippon Steel India (AM/NS India) said production was impacted because of COVID-19 issue, lower demand and curtailed logistics.


AM/NS India's main plant is at Hazira and has a downstream facility in Pune. AM/NS India has an achievable capacity of 8.5 million tonnes.


Jindal Steel & Power Managing Director V R Sharma said JSPL plants were all currently operational, however, if the situation continued for more than a week then it might impact production. JSPL is expecting to end 2020-2021 with a production of around 8.5 million tonnes.


One of the main issues that has cropped up from the lockdown is that 80-85% of trucks are not moving which is impacting dispatches.


Sharma explained that on the incoming side, while raw materials like iron ore, coking coal were moved to the plant by goods trains, smaller items like consumables and spare parts, etc. were moved by trucks. Finished goods could be transported by trains but the problem is that from the train to user industry, it would have to use trucks, he added.


"We are therefore requesting the government to allow movement of trucks for the industry. Trucks are a part and parcel of industry.


Otherwise, we could head for a major slowdown," said Sharma. "Industry is the backbone of the country. It must work," he said. Sharma suggested that the working hours could be regulated and plants could operate with 50% workforce and adequate precautions.


Regulating hours, however, would mean an impact on production. "But at least minimum break-even will be achieved," Sharma said.


At one end, steel companies were facing logistics issues, at the other, demand was lower as most of the user industries were reeling from the impact of the lockdown. Many automakers had suspended production indefinitely in the wake of the virus outbreak. Construction, too, had come to a standstill, said an industry source.


Auto accounts for 15-16% of steel usage while construction and infrastructure around 60%.


(Writing by Becky Du  Editing by Harry Huo)
For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Share this article
Connect with us

Editors Recommendations

1 China Coal Daily Track (Mar 27) 2020-03-27

Thermal coal Production area Some mines in Yulin of Shaanxi saw slightly improves sales, helping relieving stock pressure; more small mines resume production in Shenmu and Fugu in the province,

2 Inner Mongolia Jan-Feb raw coal output logs rare 14.1% drop 2020-03-27

Inner Mongolia, top coal production hub in China, logged a steep year-on-year decline of 14.1% in raw coal production in the first two months this year, according to official data, primarily affected

3 China's State Grid 2019 profit hits 6-year low 2020-03-27

State Grid Corp. of China said its profit totaled 77 billion yuan in 2019, down 1.26% from a year ago, hitting a new low since 2014, the company said in a reported dated March 24. The cou

4 Spot Australian coking coal further slides in China; decline may not ease quickly 2020-03-27

Spot Australian premium coking coal further softened in China, a response to coke producers' tepid restocking as their profit margins dived close to zero. Settlement prices of spot Austra

5 Large offer-bid spread curbs Indonesian thermal coal trade in China 2020-03-27

The gap was still large between offers and bids of Indonesian thermal coal in the Chinese seaborne import market, as participants were hard to capture the market direction under the Covid-19 pandemic,

6 47.4 GW coal fired power projects cancelled in India in 2019, Report 2020-03-27

A staggering 47.4 GW coal fired power projects at different stages were cancelled in India in 2019 reducing total under development coal capacity to 66 GW. The data was compiled in a repo

7 China's spot thermal coal market further sapping on weak sentiment 2020-03-27

China's spot thermal coal market continued sapping near late this week, given battered market sentiment and tapered buying appetite from end users. Following 16 straight sessions of fallb

8 China's planned coal power capacity surged 46% in 2019 2020-03-27

China's planned coal-fired power capacity last year increased for the first time since Beijing imposed restrictions on new coal plant proposals and permits in 2016, a joint study by four international

9 China's steel supply surplus may linger in short run 2020-03-27

China's steel market is likely to continue dealing with supply glut in the short run, even if rebooted infrastructure and manufacturing activity could boost demand, said experts. In spite

10 China Coal Daily Track (Mar 26) 2020-03-26

Thermal coal Production area A few coal mines in Ordos of Inner Mongolia saw improved sales after previous price slumps, supporting prices to edge up 5 yuan/t, while most mines saw prices drop

Most Read Articles

1 Indonesian thermal coal prices keep stable late last week 2020-03-23

Prices of Indonesian thermal coal closed last week with almost no clear change in offers and bids in the Chinese seaborne import market. Participants were more bearish about the near-term market as we

2 China met coke market outlook remains divided 2020-03-23

The near-term outlook for Chinese metallurgical coke market remained divided among participants due to various reasons. Some steel mills were mulling over a fifth cut of purchase prices,

3 Covid-19 impact on global coal supply may bolster Indonesian thermal coal 2020-03-26

Worldwide Covid-19 pandemic has brought several key production countries of coal into lockdown, threatening global supply of the fossil fuel. This may bolster Indonesian thermal coal prices by neutral

4 Import curb yet to have obvious impact on China's seaborne coal imports 2020-03-25

At present, China has imposed strict restrictions on coal imports. It's learned that coastal areas like Fujian, Guangxi and Guangzhou have curbed seaborne coal imports to varying degrees, but coal arr

5 China's seaborne thermal coal market closes lower last week on concerns 2020-03-23

China's seaborne thermal coal market closed even lower last week on the back of multiple concerns raised by participants for the April market trend. Trading activity remained in the doldr

6 Mongolia resumes coal exports from Gashuun Sukhait on Mar 23 2020-03-24

Mongolia officially resumed coal export business through Gashuun Sukhait to its largest market China on March 23, the country's Finance Minister Chimed Khurelbaatar said on the same day, following a s

7 China's steel product prices moderately rebound in mid-Mar, NBS 2020-03-25

China saw mild upward revisions for steel product prices in mid-March, official data showed, riding on multiple positive factors of improving market liquidity, firm iron ore prices and better macro-

8 Thailand Feb thermal coal imports hit an 18-mth high 2020-03-25

Thailand's thermal coal imports hit an 18-month high in February, with a significant increase from a year earlier, customs data showed. In February, Thailand's imports of thermal

9 China's seaborne import coking coal market extends weakness 2020-03-23

Chinese seaborne import coking coal market, mainly Australian coal, continued being affected by weakness in both supply and demand late last week, and its strength is being eroded by plunged domestic

10 Chinese 5,500 Kcal thermal coal plummets to 3.5-yr low 2020-03-25

Chinese 5,500 Kcal/kg NAR thermal coal traded at northern ports plummeted to a three-and-a-half-year trough, losing a total 27 yuan/t in nearly one month of cutbacks amid ripple effect of coronavirus.

Scan to download sxcoal.com mobile APP

X