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|INDIAN STEEL SECTOR|
|Yard Sticks for Economic Growth of India||By Narendra Kumar Nanda, Director (Technical), NMDC Limited|
Can we think of development of any nation without usage of steel? Probably the answer is NO. Then where does Indian Steel Industry stands?
Steel is a key ingredient for economic growth. It is an essential input for most manufacturing activities and for building the infrastructure necessary for economic development. Over the past decade, the steel industry has experienced an unprecedented expansion in production capacity, as many developing economies entered a metal-intensive stage of growth.
The steel sector in India is almost a century old, and exhibits significant economic importance due to rising demand by sectors such as infrastructure, real estate, and automobiles, in domestic as well as international markets. The level of per capita consumption of steel is an important determinant of the socio-economic development of the country.
The Indian steel industry is divided into primary and secondary sectors. The primary sector comprises a few large integrated steel providers producing billets, slabs and hot rolled coils. The secondary sector involves small units focused on the production of value-added products such as cold rolled coils, galvanised coils, angles, columns, beams and other re-rollers, and sponge iron units. Both sectors cater to different market segments.
The Indian steel industry has entered a new development stage since 2007–08 and is riding on the resurgent economy and the growing demand for steel. India’s 33 per cent growth in steel production in the last five years was second only to China among the top five steel producing nations, according to data by World Steel Association (WSA).
India is the fourth largest producer of crude steel and the largest producer of soft iron in the world. Presently, the Indian steel industry employs around 500,000 people while the per capita consumption in 2013 stood at around 57.8 kilograms. However, these figures are expected to rise with increased industrialisation throughout the country.
Let’s have a quick look on Indian Steel production figures:
• Data on production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are given below for last five years and April-December 2014-15:
• Iron & steel are freely importable as per the extant policy.
• Data on import of total finished steel (alloy + non alloy) is given below for last five years and April-December 2014-15 (provisional:
• Iron & steel are freely exportable.
• Data on export of total finished steel (alloy + non alloy) is given below for last five years and April-December 2014-15 (provisional).:
The above statistics gives a clear indication that although there have been a significant growth in steel production in the country in last five years but the concern is the low per capita Steel consumption which is around 58 Kg as against world’s average of 210 kg.
The centre is aiming augmenting the steel sector and removing the hurdles in steel production by scaling up production to 300 MT by 2025 from the 81 MT in 2013-14, the demand for steel in India is expected to rise by 4-5 per cent this year and will touch a compounded annual growth rate (CAGR) of 15 per cent after FY17. Especially Government's high focus new projects, developing infrastructures, including the freight and industrial corridors, development of smart cities, metro rail projects etc are expected to increase the domestic steel demand. The new MMDR amendment ordinance is also a move by Government to encourage the Steel & Mineral sector in India.
The vision of strengthening the Steel sector in India needs
Irrespective of low per capita consumption of Steel in India, there is still a good demand of Steel in Indian market. Most of the projects in India are awarded in EPCM / turnkey basis. And it is observed that the executing agencies / contractors are procuring equipments and fabricated structural steel from China. Reason being this is more economical than getting it fabricated in India. This is really a matter of concern and following things needs to be looked into to address the issue;
The other major challenge that our Steel industry is facing is sourcing of coking Coal. The in-situ reserves of Coking coal in India is 33.47 Billion Tonnes as on 01.04.2011 upto 1200 m depth.
As per National Steel Policy – 2012 (NSP), the requirement of critical raw material for steel making (in million ton) are;
India has been able to produce Iron ore up to 150 million ton in the last Fiscal (2013-14) and this is expected to increase further. But we are lacking in good quality coal reserves required for Steel making. In india coal for steel making is generally imported. The prices of coking coal in international market directly affect the cost of production of Steel in India.
However considering the slow growth of mineral sector in India and the challenges faced by miners due to Environmental issues, even requirement of Iron ore may become a major bottleneck in the growth of Steel Sector in India.
To achieve the target of 300 million ton of steel production in India by 2025, the above issues need to be looked into seriously. Also we need to strengthen our R&D sector for Steel Industry by contributing more towards beneficiation projects, alternate steel making technologies, more & more utilisation of fines, recycling of steel, low consumption of power, etc. At the same time thrust is also required to be given towards fast decision making, avoiding procedural delays and timely execution of the projects.
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