Increasing production, raw material security steel sector’s focus in 2022

Increasing per capita steel consumption and production of special steel as well as enhancing raw material security will remain the key focus areas of the government in 2022.


Steel sector

Increasing per capita steel consumption and production of special steel as well as enhancing raw material security will remain the key focus areas of the government in 2022.

Minister of State (MoS) Faggan Singh Kulaste said the focus will also be on finding new markets as the production of steel continues to grow in the country.

As per the National Steel Policy 2017, the government has set a target to ramp up the country’s crude steel production output to 300 million tonnes (MT) by 2030. The policy also seeks to increase the domestic per capita steel consumption to the level of 160 kg by 2030.

In an interview with PTI, Kulaste said the per capita steel consumption in the country is at around 72.3 kg at present, while the capacity is at 143.9 MTPA (million tonnes per annum), and the focus will also be on increasing the output of special steel.

According to the minister, the Indian steel sector is full of opportunities, and the country must aim to grab the numero uno position in quality steel production.

The ministry has already directed the public sector undertakings (PSUs) and private players to take measures to cut imports of special steel.

In 2021, “We signed an MoU with Russia for (to diversify) the supply of coking coal. Players are already using it. The talks with Mongolia are progressing (for the supply of coking coal). PSUs and private players have been directed to increase their Capex and outputs,” the minister said.

Besides iron ore, coking coal is another key raw material used for making steel. The industry remains dependent on imports from a select group of countries like Australia and South Africa to meet 85 per cent of their coking requirement.

Industry body Indian Steel Association (ISA) said the finished steel demand in India is expected to be up by around 16.7 per cent to reach around 104 million tonnes by the end of 2021, and by the end of next year, it will be at 111 million tonnes.

ISA Secretary-General Alok Sahay said crude steel production during January-November 2021 period stood at 104.91 million tonnes, and finished steel production and consumption was at 97.882 million tonnes and 93.057 million tonnes, respectively.

“We expect 124-125 million tonnes of crude steel output by 2022-end. Economies have been affected globally by the pandemic and India has been no exception.

“However, Indian economy rebounded back very quickly and steel industry also was put back on rails with the revival of domestic demand growth. Upfront liquidity in infrastructure projects in the pipeline coupled with the government’s emphasis on close project monitoring is driving the steel demand in 2022,” he said.

ISA is the apex industry body representing the domestic steel players.

In a statement, the state-owned Steel Authority of India Ltd (SAIL) said 2021 was a challenging year for the company and the entire industry.

In the April-June period of the passing year, the company faced one of the “severest calamities” in the form of the coronavirus pandemic.

However, in 2022, SAIL said it would aim to reduce the borrowings of the company. Its gross borrowings stood at Rs 22,478 crore as of September 30, and the same was at Rs 35,350 crore at the end of March this year.

“In the medium term, we would like to plan our next phase of modernisation and expansion. Our low debt-equity ratio of about 0.44 gives us the confidence and the opportunity to embark on this next phase of capacity expansion.

“We would put more thrust on operational efficiency, digital initiatives, enhanced mining operations, maintaining status as a preferred supplier of steel, etc. in the coming year,” the company said.

Tata Steel CEO and MD T V Narendran said the initial few months saw the world and India come out of the COVID crisis with accelerated economic recovery, aided by a concerted focus on vaccination, liquidity push by central banks, policy support and massive investment in infrastructure.

During the second COVID wave in April and May, when India bore the brunt of the humanitarian crisis, the steel industry was able to supply liquid medical oxygen and various COVID-related infrastructure support.

“We are optimistic about 2022 and believe that the current strong upcycle will sustain for a longer horizon. The government’s focus on infrastructure, ongoing reform measures, including divestment, rationalisation of the Goods and Services Tax, and unwavering thrust on initiatives like ‘Aatmanirbhar Bharat’ will provide momentum to India’s growth story,” he said.

On the business front, Narendran said, “We expect continued focus on enhancing the ease of doing business while also reducing the overall cost of doing business. We look forward to policy measures to promote usage of steel industry by-products like steel slag, implement a national mining index and revamp the mines auction process”.

In a statement, JSW Steel CFO and Joint MD Seshagiri Rao said the importance that has been given to the infrastructure and the National Infrastructure Pipeline (NIP) has created a huge demand for steel. With the kind of policies that are being followed by the government “I am sure that in the Indian steel industry we will become the 300 MT country… before 2030”.

V R Sharma, Managing Director of Jindal Steel and Power Ltd (JSPL), said that in 2022, the steel industry would enhance its role in national development, employment generation and continue to participate meaningfully in economic developments.

“We at JSPL is advancing in our quest of making available world-class steel products at an affordable price for building nation of our dream. We are going to enhance our production during 2022, which will further increase the availability of steel in the domestic market,” he said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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