Mixed picture in steel output last year

Tough market conditions saw a drop in capacity utilisation for RINL, JSW Steel and JSPL in 2015-16

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

According to official data, utilisation at India’s largest private producer in the segment, JSW Steel, fell from 90 per cent in 2014-15 to 76 per cent in 2015-16. The company had a working capacity of 16.6 million tonnes (mt) and produced 12.6 mt. RINL,also government-owned, saw utilisation fall from 113 per cent in 2014-15 to 58 per cent 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 in 2015-16, which it was unable to exploit properly. JSPL's utilisation decreased from 89 per cent in 2014-15 to 79 per cent in 2015-16. While production capacity remained the same at four mt in both years, production decreased from 3.55 mt in 2014-15 to 3.17 mt in 2015-16.  

The three companies did not respond to questions sent by Business Standard. National steel capacity utilisation decreased from 81 per cent in 2014-15 to 76 per cent in 2015-16.  Last year, we had the capacity to produce 118.2 mt but produced 89.7 mt. Essar's utilisation increased from 33 per cent in 2014-15 to 37 per cent in 2015-16.

“We have ramped up the production since November last year. Targeted production in the current year is 80-85 per cent,” said an Essar spokesperson to this newspaper.

SAIL saw its utilisation increase from 79 per cent in FY15 to 82 per cent in FY16. It is the largest producer, with FY15 output at 14.2 mt. Last year, it was 17.5 mt. "We're ramping up capacity to 21.5 mt of crude steel in the next two years. SAIL plans to produce around 17 mt during 2016-17,” the company spokesperson said.