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India: Oxygen diversion not to hit steel production
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24 Apr 2021, 18:41 IST
India: Oxygen diversion not to hit steel production

Integrated steel plants are throwing a lifeline to severely impacted Covid patients. From PSUs Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Limited to private producers Tata Steel and JSW Steel to Vedanta and more, all are pitching in with liquid medical oxygen (LMO) even as new infections breach the 3.33 lakh per day level.

At a recent high-level meeting, the Prime Minister was briefed on how oxygen supply to states is steadily increasing. Against the present demand from 20 states of 6,785 tonnes/day of LMO, the Government of India (GoI), from April 21, has allocated 6,822 tonnes/day to these states. It was noted that, in the last few days, availability of LMO increased by about 3,300 tonnes/day with contributions from private and public steel plants, industries, oxygen manufacturers and through prohibition of supply of oxygen for non-essential industries. GoI has allocated distribution of LMO from each of the integrated steel plants to various states.

And the bonus is that, even as industrial-use oxygen gets diverted to hospitals for saving lives as a priority, steel production will not be dented, assured industry sources.

The shortage of medical oxygen at present can be put down to mainly logistical reasons, said a source. The demand-supply gap is being met from medical oxygen suppliers who are ramping up production. In the meantime, non-medical oxygen suppliers like the steel plants are also pitching in. As per a technical expert, liquid oxygen storage at steel plants varies from 2,000-5,000 tonnes, where half of that is kept as a buffer and this goes up during shutdowns. Generally, a 4-5 million tonne plant would have a 5,000 tonnes oxygen making capacity but which would normally operate at around 2,500-3,000 tonnes.

But diversion of LMO is not forcing the steel plants to stop production.

And the reason is that more than 30% of the oxygen produced is kept in the liquid form, which can be transported and therefore can be given away as medical oxygen. This volume, anyway, would be stored. Therefore, the impact on steel production will be minimal and temporary till the medical oxygen producers are able to adequately ramp up production. The present crisis may continue till next month but start tapering off from mid-May.

Speaking exclusively to SteelMint, Arnab Hazra, Deputy Secretary General, the Indian Steel Association, said the impact on steel production, on account of the diversion of industrial oxygen towards fighting Covid will be minimal because the capacity utilisation is fairly high at present among the integrated players.

"Even if production is dented slightly for one month, it will not affect the overall annual steel production for 2021. Production will even out over the mid-term. We may see a temporary, short-term dip in production. About 50-55% of the market comprises the integrated players. These plants can take a 10-15% hit individually but overall, the industry will take a 5-7% hit in terms of production which will even out on an annualised basis," Hazra told SteelMint.

He added that month-on-month production may be marginally hit. But, reminded that production in any case increases 5-7% year-on-year which will negate the short-term dip. This calculation is based on the fact that a little above 30% of the oxygen is kept in liquid form and which is being given away to hospitals by the steel plants.

As said V.R. Sharma, Managing Director of JSPL, the Angul plant has a capacity to produce 2,500 tonnes per day of oxygen but a part of it is kept in liquid form. The oxygen is produced and reaches the blast furnace in a gaseous form through a pipeline. "When we go into shutdown we keep the oxygen in liquid form as a safety stock. We can supply 100% of this liquid stock towards fighting Covid and saving lives."

Dr Anil Dhawan, Executive Director, Alloy Steel Producers Association of India (ASPA), opined that, "There is likely to be little or no impact on steel production and, if any at all, there will be no impact to domestic customers. The shortfall, if any, could be adjusted in export offers in future."

Integrated Plants Offer Lifeline

Responding to the national urgency for LMO, Tata Steel has been supplying over 300 tons of liquid medical oxygen (LMO) daily to various states (Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telengana, Jharkhand, Odisha, Bihar and West Bengal) and hospitals, a Tata Steel spokesperson said.

JSPL is willing to divert up to 100 tonnes per day of LMO from its Angul plant and is maintaining a stock of 600 tonnes from its captive oxygen production."We have to save lives first. Steel production can come later, it can be increased later. Even if we lose 5-15% of production, we can save 1,000s of lives," Sharma insisted.

SAIL, in the last six days, has supplied, on an average, 660 tonnes of LMO per day from its plants. On April 21, 2021 alone, the company supplied 891 tonnes. With increase in demand, SAIL has enhanced its focus on increasing production since beginning of April. All its plants have been advised to maximise production of LMO and optimise dispatch logistics so as to reduce turnaround time of oxygen tankers. With the help of Indian Railways and the Ministry of Steel, SAIL plans to load a rake from its Bokaro Steel Plant. "This will help greatly in bulk evacuation of LMO and faster arrival of the same at the destination," a release said.

Vedanta Group companies Hindustan Zinc (HZL) and Electrosteel Steels (ESL) have stepped in to augment oxygen supplies as part of its Vedanta Cares initiative. Sterlite Copper, which has one of the largest oxygen facilities in the country at Tuticorin, has reached out to the Tamil Nadu government and Union Health Minister Harsh Vardhan with offer to help, seeking approval to operate its 1,000 tonnes per day oxygen plant to meet the rising demand. The company has also filed a petition outlining its offer to help in the Supreme Court in view of the legal proceedings. HZL has supplied 1,500 litres of industrial oxygen to the Udaipur health administration. The company transported a 1,000 litre liquid oxygen tanker from its industrial oxygen plant at Rajpura Dariba Complex, which has dedicated 100% of its monthly production of oxygen to hospitals. HZL is supplying industrial oxygen, which will undergo a clinical procedure to be used for medical treatment. ESL has registered its plant near Bokaro for LMO and has committed to supplying up to 10 tonnes of oxygen daily, based on the steel ministry's requirement.

RINL has its own captive oxygen plant primarily for the process of steel making and has already supplied more than 9,000 tonnes of LMO since onset of the pandemic. Faced with the crisis of supplying LMO to far-flung locations like Maharashtra, a decision was taken on April 18 to transport the life-saving gas by Indian Railways. "Appreciating the urgency, the assessment of the road and rail logistics inside the plant and finalisation of the rail track and the site for the roll on-roll off (RORO) facility were done on April 18 itself and a ramp for facilitating RORO was constructed within thirty hours. The first Oxygen Express from Maharashtra, with 7 empty cryogenic tankers with a total carrying capacity of more than 100 tonnes of LMO reached the newly-built ramp within the plant premises opposite the new wire rod mill-2 at 4.00 am on April 22. By 6 pm all the seven tankers filled with a total 102 tonnes of LMO were brought to the ramp and rolled on to the flat wagon. The first Oxygen Express chugged off at 10.00 pm on April 22.

Oxygen & Steel

LMO is high purity oxygen. On the other hand, industrial oxygen is used for combustion, oxidation, cutting and chemical reactions in industrial plants. Before diverting industrial oxygen for medical purposes, companies need to complete the purification process at the oxygen plants within their premises.

Oxygen is used for various purposes by the steel industry. This includes the primary steelmaking processes (basic oxygen furnace and electric arc furnace) and the secondary steelmaking processes. In addition to technical purposes like oxy lancing and scarfing of steel, gas is also used for the enrichment of blast air in the blast furnace iron making process.

More than a year ago, the central government, for the first time, had decided to allow manufacturers of industrial oxygen to produce and sell the gas for medical use.

The contribution by steel plants is significant as India's total LMO consumption is pegged at around 5,000 metric tonnes per day while its total production is estimated at around 7,287 MTPD. Since the pandemic outbreak, around 28 oxygen units from major public and private sector steel plants are supplying around 1,500 MTPD of LMO across the country, as per data by the Ministry of Steel. Union Minister for Steel Dharmendra Pradhan recently said the steel fraternity has supplied 1.43 lakh tons of oxygen towards fighting Covid.

By Madhumita Mookerji



24 Apr 2021, 18:41 IST



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