Lockdown: Steel players start re-working on business plans

The domestic steel players have started re-working their business plans for the next phase of the lockdown, which was announced earlier in the day by the prime minister, industry sources said.

Prime Minister Narendra Modi announced that the current lockdown will be extended till May 3, saying it is necessary to contain the spread of the novel coronavirus in the country.

He said detailed guidelines on implementation of the new lockdown will be announced on Wednesday, and some relaxations may be allowed after April 20 in places where there are no hotspots.

The industry players who were planning to scale up production have now started to re-work their strategy in the wake of the extended lockdown period, sources said.

Any decision regarding scaling up the output levels will be now taken after April 20, they said.

The demand for steel fell due to the outbreak of COVID-19 followed by the lockdown period, which ultimately led to reduction in production level.

Some of the major steel producers like Steel Authority of India Ltd (SAIL) and Tata Steel Ltd (TSL) which together contribute about 20 per cent to India's total steel production had slashed production by almost 50 per cent.

At the Rashtriya Ispat Nigam Ltd (RINL), daily production level of hot metal came down to 12,000 tonne from 18,000 tonne.

Last week, Sajjan Jindal-led JSW Steel had even announced that it has started preparations to scale up its production levels.

The domestic players are also concerned about the inventory levels which has built up during the lockdown, sources said adding there is no issue in movement of raw materials.

"After the government's intervention, supply of raw material remains unaffected but due to lack of demand inventories have built up. If things continue, storage will be another issue," one of the source said.