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Alloy Steels imports scrap iron due to acute shortage

Kohinoor Mandal

Alloy Steels Plant was forced to import scrap iron as it was facing a severe crisis of this item in the local market, which is its basic raw material.

Kolkata , Sept. 20

ALLOY Steels Plant (ASP), a unit of Steel Authority of India Ltd, producing speciality steel items, has started importing scrap iron through the Metal & Scrap Trading Corporation Ltd (MSTC).

The Durgapur-based ASP was forced to import scrap iron as it was facing a severe crisis of this item in the local market, which is its basic raw material. ASP has already imported 1,000 tonnes of scrap iron from Europe.

According to Mr N.P. Jayaswal, Executive Director of ASP, another 6,000 tonnes is being imported by MSTC. This consignment is expected to reach the plant shortly.

"There is an acute shortage of scrap iron in India. We had no other option but to import scrap iron. This is the first time in recent years that we are importing this item. In fact, India has become a net importer of scrap iron," Mr Jayaswal told Business Line.

ASP is also using some pig iron for steel production, which they are buying from the Orissa-based Neelachal Ispat. Industry sources said shortage of scrap iron would continue to increase because domestic steel producers are constantly improving their efficiency by reducing scrap generation.

ASP's capacity for liquid steel production is 2.46 lakh tonnes per annum and its saleable steel capacity is 1.87 lakh tonnes per annum. The plant is trying to reduce its dependence on scrap iron.

"Ultimately ASP would have to go in for its own hot metal production and it would opt for the direct reduced iron process. In the finishing section it would produce long products of stainless steel. The main idea is to make ASP self-sufficient on all fronts," he said.

Meanwhile, ASP is likely to place orders for its AOD (Argon Oxygen Decarburisation) unit next month. It is also refurbishing its electric arc furnace.

ASP has initiated an informal dialogue with a number of leading oxygen gas producers for its proposed 100 tonnes per day oxygen plant. It would be built on a BOO (build-own-operate) basis.

"We would like to go in for a long-term contract. To start with, it would be for 10 years with the renewable clause in it. We will soon place advertisements for the oxygen plant," he said.

In the first five months of 2003-04, ASP has recorded a growth in turnover of 55 per cent to end at Rs 203 crore against Rs 130 crore in the corresponding period of 2003-04. In the current year, it is expecting a 23 per cent growth in sales in terms of volumes.

At present, the ASP manpower is 2,778 against 7,000 in 1992-93. According to Mr Jayaswal, the ideal employee strength should be 1,500. The plant is catering to the demands of the defence sector and the nuclear power plants.

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