ArcelorMittal Nippon Steel
India (AM/NS) has restarted many of its production units, including COREX, Conarc, hot strip mill, compact strip mill to ramp up production. Production at blast furnace, too, has been ramped up in line with demand.
But a further increase in production is riddled with challenges. A spokesperson for AM/NS India cited normalising supply chain and production ramp-up at customer end as major challenges.
Officials at Steel Authority of India Ltd (SAIL) said things were starting to move. Customer meets were being held. But most of the demand currently was from government segments. "Availability of labour remains a challenge," said an official.
Jindal Steel & Power Ltd (JSPL) Managing Director V R Sharma pointed out that steel markets were still closed. "The MSMEs
need to be allowed to function without permission."
With labour and supply chain pangs being felt across industries after more than a month and a half of the lockdown, the chorus for easing lockdown
measures is getting louder.
According to Sharma the current phase of lockdown
should be lifted before May 17 and a Lockdown 4.0 would definitely be disastrous. "Consumption needs to pick up," he said.
The wheels of the economy need to move, said another producer who did not wish to be named. "The restart is haphazard. At least e-commerce of non-essentials should be allowed. That will create some demand," he added.
What was impeding the restart process was the level of clearance, the producer explained. The first layer is the guidelines from the Ministry of Home Affairs (MHA), followed by state-level tweaks and finally local-level clearances.
Most analysts have forecast a high single-digit to double-digit contraction in demand for steel this year. The Indian Steel Association (ISA) forecast a demand contraction of 7.7 per cent last month on account of lockdown measures.
However, till domestic demand makes a significant recovery, companies
have turned to exports. JSPL has exported around 80 per cent of its output. Most other companies
too have exported more than 60 per cent in April and May.