Soaring Oxygen Demand Makes Indian Tycoon Cut Steel Output
Workers load refilled oxygen tanks into a vehicle at a refill station in Navi Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Soaring Oxygen Demand Makes Indian Tycoon Cut Steel Output

India’s most valuable steelmaker is cutting output to step up supplies of medical-grade oxygen as the country grapples with a devastating shortage of the life-saving gas amid surging coronavirus infections.

JSW Steel Ltd. said Tuesday it is reducing output to augment liquid medical oxygen supply to more than 900 tons a day by April-end, and more than 20,000 tons for the entire month. It joins Steel Authority of India Ltd., which said Monday its Bhilai plant is taking a temporary shutdown to boost oxygen supplies.

The measures come as India becomes the second-worst place affected by the virus globally, with hospitals overflowing with the sick and dying, and oxygen supplies running out. The government has also restricted the industrial use of liquid oxygen to boost supplies for medical purposes. Steel mills are not on the list of industries excluded from the order.

Other mills, including Tata Steel Ltd. and Jindal Steel & Power Ltd., have also been supplying oxygen for medical purposes in the past few weeks. Factories have also undertaken to reduce liquid oxygen safety stocks to 0.5 days instead of the normal requirement of 3.5 days in their storage tanks.

“Saving lives is more important than producing steel and production can suffer for as long as the country is in need of any resource available with the company,” JSW Chairman Sajjan Jindal said in a statement.

Steel plants require gaseous oxygen, primarily for enrichment in blast furnaces, apart from general purposes like lancing and gas cutting. Captive oxygen plants are designed to produce mainly gaseous products of oxygen, nitrogen and argon, which are then processed further in the plant.

Last week, Jindal Steel’s Managing Director V.R. Sharma said that “maybe some 5% to 7% production loss can be there but it is nothing, and can be made up in times to come.”

Shares of steel mills in India have soared as product prices have rallied and demand has recovered. The resurgence in Covid-19 cases in India and fresh restrictions to curb the spread of the virus could hurt the nascent revival in Asia’s third-largest economy and dent steel consumption.

©2021 Bloomberg L.P.

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