SAIL Set to Commence Trial Production of Special Rails by Month-End, Says Chairman Amarendu Prakash.

Steel manufacturer SAIL (Steel Authority of India Limited) is gearing up to initiate the trial production of head-hardened (HH) rails, which are vital for metro rail and freight corridor projects, by the end of this\month, as confirmed by Chairman Amarendu Prakash.

Originally, SAIL had planned to commence the trial production of HH rails in August. However, the start date was deferred due to the strong demand for normal rails, particularly the 880-grade rails, by the Indian Railways, as shared by Chairman Prakash during an interview with PTI.

"We have the technology. We had planned for it (HH rail production) but then...they (Railways) requested us to defer the trials and now it is at the end of October," Chairman Prakash explained.

HH rails are specialized rails designed for high-speed freight corridors and metro rail projects. These rails are manufactured using head-hardening technology, enabling them to withstand about 50 percent higher pressure compared to standard rails. SAIL has established production facilities for HH rails at the new Universal Rail Mill (URM) located within its Bhilai Steel Plant (BSP) in Chhattisgarh. Cold trials for HH rail production at this facility have already been successfully completed.

Once the trial production commences, SAIL will become the second player in India to produce HH rails, with Jindal Steel and Power Ltd (JSPL) already manufacturing them at their plant in Raigarh, Chhattisgarh.

SAIL also plays a significant role in the production of forged wheels for the Indian Railways, primarily carried out at the Durgapur Steel Plant (DSP) in West Bengal. These rails and wheels are supplied to the Indian Railways to meet their requirements.

In terms of coking coal sourcing, Chairman Prakash detailed that SAIL procures coking coal from various global sources, including Australia, the United States, Russia, and Indonesia. Additionally, SAIL has a joint venture company in Mozambique, which aids in sourcing coal. During the April-September period of FY24, SAIL sourced approximately eight shipments of 75,000 tonnes each of coking coal from Russia.

To bolster coking coal supplies, SAIL has plans to double the production capacity of its Mozambique-based ICVL (International Coal Ventures Limited) from 2 MTPA to 4 MTPA. A detailed project report is currently being prepared in this regard.

Chairman Prakash acknowledged that the rising prices of coking coal would have a direct impact on input costs and could exert pressure on profit margins. Coking coal prices surged from $230 a tonne in June-July 2023 to reach $341 per tonne CFR (cost and freight) for India by the end of September.

Regarding the EU's mechanism of carbon border adjustment tax (CBAM) on exports, Chairman Prakash mentioned that it would add to the cost of supplies to Europe for Indian exporters. However, the precise impact and extent of the impact are yet to be determined, as Europe is still in the process of formulating this mechanism.

SAIL, under the Ministry of Steel, is India's largest steel-making company, with an annual production capacity exceeding 21 MTPA.

HBL