NINL plant to restart a month later, may disrupt pig iron supply further

Neelachal Ispat Nigam Limited (NINL), one of India’s largest pig iron producers, would be able to recommence production of the vital semi finished product only by the end of April, Causing a further disruption to supply of pig iron both domestically and overseas.

It may be noted here that NINL had stopped production of pig iron entirely in the end of November for crucial blast furnace capital repair works which had been long overdue for the 17 year old plant. The shut down caused sudden shortage in supply of pig iron, causing prices to rise marginally during the month of January’18.

It was earlier being believed that the plant would be re-commissioned by end of February’18. However official sources revealed to SteelMint that the capital repair work would only be completed by the end of March and the blowing, reheating and fine tuning process would further take 27 days. Optimum production would only be achieved by end of April, sources revealed.

Presently lancing activity is underway at the plant and work is being undertaken at an expeditious rate, official sources revealed. It has also been learnt that the company has been producing a sizable quantity of Coke for sale in the domestic market while the blast furnace is not in operation.

It has also been learnt that following the capital repair works at NINL the furnace which was earlier functioning at 55% capacity would be able to scale up to 95%. In addition to increase in capacity utilization coke rate in the furnace would also be reduced drastically owing to the installation of pulverized coal injection technology. The up gradation would also facilitate output of superior quality coal.

Supply from Sesa Goa also in question after Feb’18

It may noted here that production from another major producer of pig iron, Sesa Goa, might also be affected significantly in months to come following the cancellation of all mining leases by the Supreme Court in Goa.

The company had been producing around 0.7 MnT/ of pig iron and Iron ore from Goa contributed to almost 80 percent of its raw material demand. The hurdles in supply of Pig Iron can affect the domestic market considerably in the next couple of months.

Pig Iron Prices Increases in Eastern India on Short Supply

Steel grade Pig Iron prices in Eastern India - West Bengal & Jharkhand rise sharply by INR 700-1,000/MT (USD 8-15). Reduced supply by private pig iron producers resulting sudden hike in prices.
SteelMint learnt that couple of merchant private pig iron producers based in Jharkhand who's monthly average pig iron sales is about 70,000-80,000 MT have suddenly halted their merchant sales due to rise in captive consumption.

- Boakaro based private producer reported no sales for pig iron and the last deals were reported at INR 26,200-26,400/MT (ex-mill). Officials from the company mentioned that since a week the hot metal is used for final products due to better margins.

- Similarly, in Giridih where another merchant steel grade manufacturer reported close sales due to maintenance work in plants. The producer has two blast furnaces and produce nearly 1,500-1,800 MT pig iron on daily basis.
These manufacturers are largely sells pig iron in North-East belt - Durgapur & Ludhiana, hence with the sales completely stopped, price in these respected markets also picked up sharply.

- Durgapur based Neo Metaliks offers for steel grade material are assessed at INR 27,500/MT against last week at around INR 26,500/MT.

- The stockiest in Ludhiana also stated rise in prices is about INR 300-500/MT for both steel & foundry grade and latest offers are reported - steel grade at INR 28,800-29,200/MT & Foundry grade at INR 32,700-33,000/MT FoR & excluding 18% GST.

Meanwhile, in Raipur offers through traders are almost remained firm for steel grade at INR 28,200-28,500/MT.