JSW Steel prepares to restart full-scale production after lockdown ends on April 14th

MUMBAI: JSW Steel on Tuesday said that it is preparing to restart production at all its facilities in the next few days even as its peers, including Tata Steel and SAIL, remain rather circumspect about running their factories at full tilt anytime soon.

“The company is making all preparations to recommence operations at all locations on lifting of the lockdown in the next few days,” said an official statement announcing JSW Steel's production details in FY20. This comes after the company informed the exchanges on March 25 that it was scaling down/suspending production across units.

Tata Steel, which has curtailed production at its plants in Jamshedpur, Kalinganagar and Angul, said it would not comment at this stage. Anil Chaudhary chairman of SAIL said : "We have cut down production of hot metal by nearly 50% to around 30,000 tonne per day. Seven of our 14 blast furnaces are on standby and the rest are operating at 70-80% capacity. We would wait for an official announcement on the lifting of the lockdown before taking any steps to revive production. SAIL will calibrate its plan for ramping up production depending on whether the exit from lockdown is in phases.

Experts agree that steel plants, which operate large blast furnaces, cannot be turned on and off in a short span of time, unlike the more flexible gas-based plants or electric arc furnace units. "A steel plant is a massive entity, much like an elephant. So it takes time to move, either way," a steel industry analyst said.

SAIL said it would start preparing on scaling up production after the end of the lockdown. The government might favour a staggered exit out of the lockdown, and that would influence the resumption plans at SAIL.

During lockdown, the operations were scaled down but not completely stopped by various steel companies. However, analysts believe the real problem would be on the demand side.

"We might see an inventory accumulation happening because sales are not really taking place,” said Jayanta Roy, senior vice president, ICRA. “Whether the lockdown is extended or otherwise, demand conditions will remain weak.”