Steel
Last Updated: November 2008
The Indian steel industry has entered into a new development stage from 2005–06, resulting in India becoming the5th largest producer of steel globally, India accounts for a little over 7 per cent of the world's total production.Steel production is expected to exceed domestic requirement by 2011–12, which will help alleviate pressure on alloyprices. Steel prices have gone up by over 50 per cent since January 2008. In fiscal year 2007–08, India's crude steelproduction was 53.9 million tonnes (MT), of which about 5 million tonnes were exported.The National Steel Policy has a target for taking steel production up to 110 million tonnes by 2019–20. Nonetheless,with the current rate of ongoing greenfield and brownfield projects, the Ministry of Steel has projected India's steelcapacity is expected to touch 124.06 million tonnes by 2011–12. In fact, based on the status of MOUs signed by theprivate producers with the various State Governments, India's steel capacity is likely to be 293 million tonnes by2020.According to a report from Barclays Capital, China and India are going to provide the impetus for steel demand for the next few years.As on June 16, 2008, both domestic and foreign steel players had signed 193 Memoranda of Understanding (MOUs)with various states for developing new units with a total planned capacity of around 243 million tonnes and an overallproposed investment exceeding US$ 104.43 billion.India's buoyant demand contrasts with a dismal global outlook, with the International Stainless Steel Forum (ISSF)expecting little recovery in demand in 2008 from a year ago when rising prices of key raw materials affectedproduction cuts.
Production
Steel Minister Ram Vilas Paswan has said that an investment worth US$ 176.49 billion is likely to go into the steelsector by 2020, taking India's steel capacity to be in excess of 290 million tonnes. The Minister said, "The likelycapacity achievable by 2019–20 will be over 290 million tonnes. Going by estimate of US$ 811 million investment per million tonne of additional capacity, the sector is likely to see an investment of US$ 56.13 billion by 2012 and US$176.49 billion by 2020."The current steel production capacity is over 53 million tonnes, and the additional capacity enhancement in the sector would generate employment for around 4 million people.Paswan further informed that private and public sector steel companies are on a major capacity expansion spree.State-run SAIL's crude steel production is likely to reach 24.84 MT by 2011–12 and 60 MT by 2020 from the present12.84 MT. Likewise, RINL's crude steel production capacity will be increased from 2.90 MT to 6.80 MT by 2011–12and 10 MT by 2020. Private steel bigwigs like Tata Steel, JSPL, Ispat and JSW Steel also have major expansionplans on the anvil. Jindal Stainless and Visa Steel are planning to set up 1.6 and 0.5 million tonnes of stainless steelcapacity over the next two years.
Consumption
India is the fifth-largest consumer of steel in the world. It consumes about 1.5 million tonnes of stainless steel a year with around 70 per cent accounting for kitchenware. However, its use in railway coaches, wagons, airports, hotelsand retail stores is growing immensely. Demand for steel in India is likely to grow at around 12 per cent against theglobal average of 5–6 per cent.A Credit Suisse Group study states that India's steel consumption will continue to grow by 16 per cent annually till2012, fuelled by demand for construction projects worth US$ 1 trillion. The scope for raising the total consumption of steel is huge, given that per capita steel consumption is only 35 kg – compared to 150 kg across the world and 250kg in China.
Exports
India's steel exports reached 2.75 million tonnes in the first four months of 2008–09 fiscal. Indian steel exports in2007–08 amounted to 3.8 million tonnes. Exports had increased by 6.26 per cent in 2006–07 over 2005–06 to touch4.75 MT.However, the Indian Steel Ministry has proposed an ad valorem export duty on chrome ore (Union Budget 2008),fearing fast depletion due to phenomenal rise in exports. The government aims to first meet the needs of thedomestic industry.
Leave a Comment
read this
beautiful....