India on its way to be the second largest producer of steel in 2015-16: Study

India is expected to become
the world’s second largest producer of
crude steel in 2015-16, moving up from
the fourth position, as its capacity is
projected to increase from 100 million
tonne (MT) to about 112.5 MT in
2015-16. “All indicators suggest that India
will soon move up to the second position
both in production and consumption,” a
sectoral analysis by Frost & Sullivan’s
Metals & Mining Practice said.
With infrastructure development and
automotive industry driving steel demand,
production is expected to hit 140 MT by
the end of 2016, while consumption is
expected to grow 6.8% to reach 104MT by
2017.
According to the analysis, the Indian steel
industry is forging ahead despite “chronic
handicaps like poor infrastructure”. It said,
“The government is working proactively to
provide incentives for economic growth by
injecting funds in construction,
infrastructure, automotive and power,
which will drive the steel industry in the
future.”
Local cos change tack
With nearly all major domestic steel
producers in the process of adding a mix
of brownfield and greenfield capacity, the
total planned capacity hike in crude steel
production till 2017 is estimated at well
over 100 MT.
While total installed capacity for crude
steel in 2013 was 102 MT, capacity
utilisation was about 80%.
State-run Steel Authority of India (SAIL) is
adding 27 MT, comprising 21.4 MT of
brownfield and 5.6 MT of greenfield
capacity. Tata Steel , too, is poised to add
substantial greenfield capacity. While
JSW Steel is adding 12 MT of brownfield
capacity, JSW Ispat and Essar Steel will
add another 4.5 MT and 10 MTof
brownfield capacity, the report said, citing
data from ministry of steel and Frost &
Sullivan.
State-run Rashtriya Ispat Nigam Ltd
(RINL), which runs the Vizag Steel Plant,
is slated to add 7 MT of new capacity,
while mining major NMDC’s new steel
plant at Nagarnar in Chhattisgarh will add
another 3MT of new steelmaking capacity.
Monnet Ispat, Visa Steel and Electrosteel
are also set to add 3.5 MT, 3.75 MT and
2.5 MT of additional greenfield steel
capacity. Frost & Sullivan, however, added
in its analysis that domestic producers
will face challenges in securing iron ore
and coal, two major inputs for steel and
issues related to mining. “Delays in land
and environmental clearances, threat of
increasing imports from China and
Commonwealth of Independent States
(CIS) countries may also restraint growth
prospects,” the report added.