JSW Steel, SAIL and RINL have also cut production. Tata Steel is expected to make an announcement soon
ArcelorMittal Nippon Steel India (AMNS) has cut its production to adjust to a demand slump from key clients in auto and construction sectors.
The company is the fourth steelmaker in India after JSW Steel, SAIL and RINL, that has adjusted its production, as economic activity has come to a near standstill amidst a lockdown to limit spread of the coronavirus (COVID-19).
While a AMNS spokesperson confirmed the step, he declined to share further details. But executives from the industry said that as with all steel companies, the cut will be 'substantial' in AMNS too.
"Construction has come to a standstill amidst the lockdown and almost every auto company has shut factories. There is no point in steelmakers continuing to make steel and piling up inventories," said a senior executive from the sector.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
Construction, real estate and auto are the biggest consumers of steel.
AMNS, which was earlier known as Essar Steel, had a 'run rate' of 7.4 million tons for the financial year, said an executive, pointing out what the steelmaker's annual production would have been. "But in the second half of March, there has been a production cut," the person told Moneycontrol.
While Tata Steel, India's largest steelmaker, is yet to announce any adjustment at its production facilities, it is said to be considering a similar move.
JSW Steel had announced the cut in a notice to the exchanges on March 26. "With exception to certain specified essential activities, the manufacturing operations in all of our locations have since been either scaled down or suspended (in certain locations)," the company said.
SAIL, said a report by PTI, has cut production by 10 percent.Apart from a demand slump, steelmakers in the country are also facing a shortage of labour. Most of the steel plants employ a substantial number of contractual staff, who have said to have moved back to their home towns and villages because of the virus spread.