Capacity utilisation falls for RINL, JSW Steel and JSPL

However, Tata Steel, Essar Steel and SAIL showed an improvement in the ratio of actual production to their total working capacity

Tough market conditions saw a drop in steel capacity utilisation for Rashtriya Ispat Nigam Limited (RINL), JSW Steel and Jindal Steel and Power Limited (JSPL) in 2015-16. Tata Steel, Essar Steel and government-controlled Steel Authority of India, however, showed an improvement in the ratio of actual production to their total working capacity.

According to the data provided by the steel ministry, capacity utilisation of India’s largest private steel producer JSW Steel fell from 90% in 2014-15 to 76% in 2015-16. The company had a working capacity of 16.6 million tonnes (MT) and it produced 12.62 MT of steel in 2015-16.

RINL steel capacity utilisation saw a massive fall from 113% in 2014-15 to 58% in 2015-16. This was mainly due to large scale increase in its working capacity from 2.9 MT in 2014-15 to 6.3 MT 2015-16, which it was unable to exploit properly.

JSPL steel capacity decreased from 89% in 2014-15 to 79% in 2015-16. While the company’s production capacity remained same at 4 MT in both the years, its production capacity decreased from 3.55 MT in 2014-15 to 3.17 MT in 2015-16.

The three companies did not respond to the questions sent by Business Standard. The national steel capacity utilisation decreased from 81% in 2014-15 to 76% in 2015-16.  Last year, we had the capacity to produce 118.2 MT of steel, yet our actual production was at 89.7 MT only.

According to the government, Essar Steel utilisation capacity increased from 33% in 2014-15 to 37% in 2015-16. “We have ramped up the production since November last year. The capacity utilisation has since doubled from 35% to 70% in March 2016. The targeted production in the current year is in the range of 80-85%,” said an Essar spokesperson to Business Standard.

Government-run Steel Authority of India (SAIL) saw its utilisation capacity increase from 79% in 2014-15 to 82% in 2015-16. It is the largest steel producer in country with its last year’s production at 14.2 MT. In last year, Its steel capacity was of 17.5 MT.

“SAIL, with starting of many new facilities under its ongoing modernization and expansion plan is ramping up its capacity to 21.5 MT of crude steel in next 2 years. Many of the new facilities have already been operationalised and SAIL plans to produce around 17MT of crude steel during 2016-17,” said the company spokesperson to this newspaper.

Producer’s name	2014-15 capacity utilisation* (in percentage)	2015-16 capacity utilisation (in percentage)
SAIL	79	82
RINL	113	58
Tata Steel	97	104
Essar Steel	33	37
JSW Steel	90	76
JSPL	89	79
*capacity utilisation = (actual production/working capacity)*100
**source = Union ministry of steel