As the 21-day national lockdown in India nears its end on April 14, the indications are that restrictions are unlikely to be lifted in one go and that, on the contrary, containment measures in ‘hotspots’ could be more stringent, SteelOrbis has learned from talking to officials.
Central government considers next step
Prime Minister Narendra Modi has been holding meetings over the past few days with the federal minister, chief minister of state, members of the Covid-19 Task Force and public health experts and policy makers to chalk out the next stage, while several state governments have backed the continuation of the lockdown as the curve of new Covid-19 cases is rising sharply. The government has also said that the final nationwide decision will only be taken over the weekend.
On April 9, total new Covid-19 cases reported across the country were 485, taking the total number of cases to 5,734 and 166 deaths, according to the Ministry of Health of India.
The prime minister has given indications of a continuation of restrictions on movement of people and goods, mentioning ‘staggered lifting’ and a ‘graded exit from lockdown.’
Odisha already extends lockdown until April 30
Odisha has been the first state in India which has already extended the lockdown until April 30, according to an official announcement made by chief minister of the state Naveen Patnaik on Thursday, April 9. The total number of confirmed cases in Odisha is 42 as for now, which is much less than in other states, according to the official statistics.
Key steelmakers located in Odisha are Rourkela Steel Plant (4.2 million mt of crude steel capacity), owned by SAIL, Neelachal Ispat Nigam Limited (NINL) with 1.1 million mt of capacity, Tata Steel Kalinganagar plant, capable of producing 3 million mt of steel and its plant, previously owned by Bhushan Power and Steel. Jindal Stainless Steel operates a fully integrated steel plant in Odisha, while one of the largest facilities of Jindal Steel and Power the Angul plant with up to 6 million mt of capacity is also located in this state. Odisha is also one of the major iron ore production centers.
Many of ‘hotspots’ in the country with the highest number of cases and rising curve of new cases are the country’s biggest manufacturing hubs like the western state of Maharashtra, which has the highest number of cases at 1,135 in total, Uttar Pradesh and National Capital Region (NCR) in the north and Tamil Nadu in the south and so the continuation of the lockdown beyond April 14 is largely expected.
Expected restriction measures
Various options are being discussed by the central government. They include the continuation of the lockdown as over the past few weeks. The other options are the partial easing of restrictions in districts and areas with a low number of cases but a complete ban on public transport, inter-state and cross-border movement of vehicles and trucks barring essential services and train services.
Another option advocated by several state governments is stricter enforcement of ‘containment’ around ‘hotspots’ with high concentration of cases wherein all the local population would be quarantined, a total ban on the movement of all vehicular traffic, and house to house testing until there are no new cases detected over a 21-day period.
However, people in business and trade circles have said that lockdown restrictions would definitely not be lifted in one go and a partial lifting and/or new measures would still not normalize manufacturing and trading across the country.
Outlook for steel sector
Market players have pointed out that movement across highways and state roads barring essential commodities would continue to be banned in every possible scenario post April 14 and manufacturers would have no respite in bringing in raw materials or dispatching finished products to trading hubs.
According to an official at a steel company, while steel production has been officially put under the category of “essential commodities”, steel mills are being forced to reduce steel operations as major flux inputs for blast furnaces like dolomite and limestone are not in essential commodities and cannot be transported by road. All major steel mills have been forced to cut the utilization rates of BFs and BOFs to 60 percent at the highest and to 20 percent at the lowest depending on the producer.
Moreover, the slump of steel demand due to halts in construction projects and automotive production will not allow steel mills to return to normal production fast. Some insiders believe steel production will be reduced in April and May. The recovery of consumption will take from three to six months. As a result, the major problem for suppliers will still be preventing the buildup of inventories.