More initiatives on anvil to boost steel sector in 2023: Union Minister

With increasing steel production in the country, the focus in 2023 will be on boosting raw material supplies and producing more special grade steel, according to Union minister Faggan Singh Kulaste.

India produced 113.43 million tonne of crude steel in January-November 2022, which is 10 per cent higher compared to the year-ago period. The government aims to double the country’s annual crude steel making capacity to 300 MT from 150 MT at present.

In an interview to PTI, Kulaste, the Minister of State for Steel, said more initiatives for the sector will be taken in 2023.

Last year, the government introduced the Production Linked Incentive (PLI) scheme for specialty steel to enhance the production of the high-end alloy.

Special grade steel is used in various sectors, including power, shipping, railways and auto. The demand for this steel is being met through imports.

“Our focus will also be on taking measures to support industry besides finding new markets as the production of steel continues to grow in the country,” he said.

Ensuring the raw material security for steel production will be a key focus area for the government as the country is mostly dependent on import of raw materials like coking coal.

While other minerals are available in sufficient amounts, Kulaste said India is dependent on imports for coking coal.

The country imported 57 MT of coking coal in FY22 to produce 120 MT crude steel.

New reserves of coking coal are being identified. The country has around 34 billion tonne of coking coal, of which about 18 billion tonne have already been proven, the minister said.

“The development of technology for mining and washing can make the country self-reliant besides ushering in huge employment opportunities and accelerating the process of development of urban, semi-urban and rural areas,” Kulaste said.

In 2022, the government took various measures to support the steel industry by removing the export duty on steel items and extending export benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to products of iron and steel for a specified period.

These measures will help the domestic steel industry increase its share in the global markets, Kulaste said.

Indian Steel Association (ISA) Secretary General Alok Sahay said exports of steel, which fell around 55 per cent in April-October 2022 compared to the year-ago period, is expected to resume at a slower pace initially.

“Imposition of export duty on the steel sector led to a number of consequences for the sector and the country… India lost out on the opportunity to sell surplus quantities and thus the country faced adverse balance of trade,” Sahay said.

While there is duty relief, surge in imports at predatory prices is a challenge, he noted.

He also said rising imports have become a concern for the domestic steel industry. In April-October 2022, the finished steel imports stood at 3.151 MT, up 14.5 per cent over the same period last year. The y-o-y increase in October was around 78 per cent.

“In the prevailing global slowdown, India has become a dumping destination for various global exporters viz. dumping action is visible for HR coils for Japan and Brazil. Countries like Japan and even Vietnam are keen to export HR coils USD 575-580/ per tonne,” Sahay said.

Tata Steel’s CEO and MD T V Narendran termed 2022 “a tumultuous year for the steel industry”.

Globally, the industry started well on the back of a strong post-Covid recovery and the infrastructure investments that many governments across the world had announced to support this recovery. However, the conflict in Ukraine made worse the inflationary pressures being felt due to supply chain bottlenecks in the post Covid world. Gas prices shot up as did coal prices which led to steel prices shooting up, he noted.

“Amid all this, India continues to stand out for its economic recovery and infrastructure investment-led growth. This makes us optimistic about the future despite a challenging year. We expect 2023 to be a better year than 2022 for the steel industry globally,” Narendran said.

Sesahgiri Rao, Joint MD and Group CFO of JSW Steel, said the year saw elevated volatility in both raw material and steel prices with a steep decline in global demand.

In 2023, steel demand is expected to grow 8 per cent, Bimlendra Jha, Managing Director of Jindal Steel and Power Ltd (JSPL), said.

State-owned SAIL said the domestic steel consumption has huge potential for growth.

The recent removal of export duties also augurs well for the domestic steel industry to play aggressively in the global market, Steel Authority of India Limited (SAIL) said in a statement.

This year has been largely a year of mixed sentiments and performances for the domestic steel industry. The impact of the Russia-Ukraine war was felt across the global steel industry. On one hand, the global steel prices fell which pulled down domestic prices also and on the other hand, there was a steep price rise of input materials especially, coking coal.

Dilip Oommen, CEO of AM/NS India, said the “knock-on effects of these constraints have been felt in the second half of the year as many companies are under pressure with squeezed margins. In October, India became a net importer from being a net exporter earlier.”

Atul Bhatt, CMD of RINL, said significant progress has been made towards the targets as envisioned in the National Steel Policy 2017.

Steel companies are planning to enhance their capacities to meet the increased demand. While CPSEs are planning to add around 18 MT, private companies are likely to add around 95 MT and SSI (Secondary Steel Industry) around 33 MT capacity by 2030, 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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