Posted on 15 Dec 2021
Owing to the plunging demand for finished steel coupled with diminishing gross realisations, the Indian steel industry anticipates a downfall in steel production during the fiscal year ending 31 March, 2022.
According to Joint Plant Committee (JPC), crude steel production dropped 2% on-month to 9.63 million tonnes in November, against 9.79mt a year earlier. It remained stable on-year against 9.61mt produced in November 2020, Kallanish notes.
“The next four months are very crucial for India…but seeing the current steel demand, production growth in steel looks diminishing, says a senior management official working in the steel industry. “Domestic consumption is down; demand is low plus the export market is also plunging.”
Finished steel production and consumption in April-November is noted at 72.07mt and 66.37mt, respectively. Imports and exports totalled 3.06mt and 9.53mt, respectively.
As per National Steel Policy, 2017, India eyes producing 300mt crude steel through FY31. To encourage the mills, the government has introduced various initiatives from easing the trade process to the supply of raw materials.
The government introduced the “Domestically Manufactured Iron & Steel Products (DMI&SP) Policy” for promoting procurement of made-in-India steel. This policy aims at increasing the demand for domestically manufactured steel. It also issued a steel quality control order to stop the manufacturing and import of non-standardised steel. The Steel Import Monitoring System (SIMS) was also launched by the governing authorities for the advanced registration of steel imports.
The government has announced a Production-Linked Incentive (PLI) scheme for speciality steel with an outlay of INR 6,322 crores ($833.17m). India has also inked a supply pact with Russia for speciality steel production technology.
To enhance the steel usage and overall demand for steel in the country, the government is also engaging with relevant stakeholders from railways, defence, petroleum and natural gas. It also established the “Development Cell” in the ministry to attract and facilitate investment in the steel sector.
Source:Kallanish
