India exploring ways of meeting steel production target of 300 million tons – Minister

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India’s junior Steel Minister Faggan Singh Kulaste said the government was examining ways and means of boosting production to achieve a target of 300 million metric tons of crude steel production by 2030 despite the challenges posed by the pandemic.

“This is a big challenge for us,” Kulaste told a webinar organised by the Federation of Indian Chambers of Commerce and Industry, urging the industry to look at adding value-added steel capacity as the nation imports high-grade steel for sectors such as oil and gas as well as defence.    

India currently imports about 6.28 million tons of value-added steel.  World’s second largest steel producer India currently produces around 140 million tons of steel annually. But demand for steel has been hit due to the pandemic and it is expected to bring steel capacity addition at a standstill for some time.

Kulaste also promised to look into a demand for uniform power supply tariffs across the country that varies widely and thereby affects the viability of steel manufacture in certain regions. Power supply per unit ranges from  five rupees to as high as 15 rupees.

“We need support for this and I will broach this to the government,” he said.

Industry needs support

V. R. Sharma, co-chair of FICCI steel committee and managing director at Jindal Steel and Power, said that the industry will need to aim for consistently increasing steel production every year and urged the government to provide the necessary support.

“We have to replace imports by providing the best solution that is made in India.Government of India is helping us in putting all sorts of preventive measures by dumping” he said.”We have to increase our output by 5%-10% so that there is no shortage,” he said.

India will end up importing 15 million tons of steel every year in four to five years as per current trends, which could open the floodgates for more such orders as per current trends, Sharma added.

He urged the government’s intervention to ask banks to increase their lending to the sector.

“Presently, their outlook for the steel industry is very bad. We must change their outlook to a positive one for the banking industry. Their outlook towards the industry is negative just because of one or two incidents, Sharma said.

Economic contribution

He highlighted that the steel and stainless steel industry together contributes  about 25% of the country’s GDP.

A.K. Chaudhary, chair of FICCI steel committee and chairman of state-run Steel Authority of India Limited (SAIL), said that the industry needs to prepare for high output of value-added steel as oil and gas refiners alone are expected to double their capacity to 450-500 million tons in the next decade.

It will mean the requirement for value-added steel will double from that sector alone to 6.5 million tons, he said.

The automobiles sector growth has already started picking up, while there was need for certain high grades of steel that goes into the manufacture of assault rifles and helicopters, he said, adding that. Indian railways also imports certain steel needed for making wheels.

Chaudhary urged the government to cut levies and provide greater incentives for value-added steel in order to compete with peers in the international market.  

Sanjay Jayram, vice-president at JSW Steel,, said that the industry needed to work towards building collaborative relationships similar to the auto industry, which sources 95% of the steel it needs from within the country, though at one point of time it was as low as 25%.

He said manufacturing value-added steel would prevent the chance of any supply disruption like the one caused by the pandemic,

JSW Steel is planning to expand its annual production to 21 million tons from 18 million tons. “More than 40% of our products are in value-added steel,” Jayram said.  

Biman Mukherji is a columnist and consulting editor at Indoasiancommodities.com. He has worked for international news organisations such as Reuters, The Wall Street Journal as well as for newspapers like The Times of India. He can be reached at biman.mukherji@indoasiancommodities.in

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