INDIAN STEEL INDUSTRY REPORT

Introduction

The Indian steel industry is the world’s second-largest steel producer with production standing at 111.2 million tonnes (MT) in 2019. The growth in the Indian steel sector has risen by domestic availability of raw materials such as iron ore and cost-effective labor. Consequently, the Indian steel industry has been a major contributor to India’s manufacturing output.

Additionally, the Indian steel industry is classified into three categories – major producers, main producers, and secondary producers.

Market Size

  • India’s finished steel consumption grew at a CAGR of 5.2% during FY16-FY20 to reach 100 MT. Additionally, ndia’s crude steel and finished steel production increased to 108.5 MT and 101.03 MT in FY20P, respectively.

  • Between April 2020 and February 2021, India’s cumulative production of finished steel was 85.60 MT. Additionally in April 2021, India’s finished steel consumption stood at 6.78 MT.

  • For the period April 2020 and February 2021, India’s cumulative production of crude steel stood at 92.78 MT. 

  • Export and import of finished steel stood at 8.24 MT and 6.69 MT, respectively, in FY20P.

  • Additionally, export and import of finished steel stood at 9.49 MT and 4.25 MT, respectively, between April 2020 and February 2021. In April 2021, India’s export rose by 196% over 2020 and 17% over 2019.

INVESTMENTS

According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), The Indian metallurgical industries attracted Foreign Direct Investment (FDI) to the tune of US$ 14.24 billion in the period April 2000-September 2020.

Some of the major investments in the Indian steel industry are as follows:

  • May 2021, JSW Steel signed a Memorandum of Understanding (MOU) to conduct a feasibility study. This is strategic alliance partner JFE Steel Corporation to establish a Grain-oriented Electrical Steel Sheet Manufacturing and Sales JV Company in India.
  • March 2021, Arcelor Mittal Steel signed a Rs 50,000 crore deal with the Odisha government to set up a steel plant in the state.
  • February 2021, Tata Steel BSL collaborated with FarEye, a software logistics firm to improve its digital transformation process.
  • In a move towards becoming self-reliant, Indian steel companies have started boosting steel production capacity. Consequently,to this end, SAIL announced doubling its at 5% of its steel plants capacity in September 2020.

GOVERNMENT INITIATIVE

Government initiatives under this sector are as follows.

  • Under the Union Budget 2020-21, the government allocated Rs. 39.25 crore (US$ 5.4 million) to the Ministry of Steel.
  • In January 2021, the Ministry of Steel, Government of India, signed a Memorandum of Cooperation (MoC). Along with the Ministry of Economy, Trade and Industry, Government of Japan. Consequently to boost the steel sector through joint activities under the framework of India–Japan Steel Dialogue.
  • In December 2020, the Minister for Petroleum & Natural Gas and Steel, Mr. Dharmendra Pradhan, appealed to the scientific community to Innovate for India (I4I). This create competitive advantages to make India ‘Atma Nirbhar’.
  • In September 2020, the Ministry of Steel prepared a draft framework 
  • Government introduced the Steel Scrap Recycling Policy to reduce imports.
  • An export duty of 30% has been levied additionally, on iron ore^ (lumps and fines). This is to ensure supply to the domestic steel industry.

CONCLUSION

The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years. Additionally, the government has a fixed objective of increasing rural consumption of steel. Consequently from the current 19.6 kg/per capita to 38 kg/per capita by 2030-31.

As per Indian Steel Association (ISA), steel demand will grow by 7.2% in 2019-20 and 2020-21.

Consequently, huge scope for growth is offered by India’s comparatively low per capita steel consumption. Additionally, the expected rise in consumption is due to increased infrastructure construction and the thriving automobile and railways sectors.

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