kickstart the first phase of its new steel plant in Orissa by next year. Speaking to FEs Prashant Mukherjee and Subhash Narayan, managing director of Tata Steel, HM Nerurkar, shares his outlook for the sector. Excerpts:
With the sector going through a rough patch, where do you see steel output at the end of the fiscal
By the end of the current fiscal, we expect steel demand to be somewhere between 5% and 6% . With the economy showing signs of recovery, we expect demand to be better than FY13 but not close to the FY12 levels.
In FY14, carbon steel capacity is expected to be in the range of 80-85 million tonne. Consumption in FY14 is expected to be 5-6% higher than that in FY 13. The PMs Economic Advisory Councils estimate of 6.4% economic growth in FY14 is likely to spur investment in steel-intensive sectors, such as infrastructure. This will boost the demand for steel in coming months.
Whats the status of the Kalinganagar plant How do you plan to improve its efficiency
Tata Steel plans to commission the first phase of its upcoming steel plant at Kalinganagar in Orissa by the end of calendar year 2014. The first phase will have a capacity of 3 million tonne and the second phase will take total production capacity to 6 million tonne per annum (mtpa). We have invested over R11,000 crore in the new plant, which will produce flat steel products. The company has kept aside a capex of about R4,000 crore ($800 million) this year for the Kalinganagar unit. The 6-mtpa project is being set up in two phases.
Whats the status of mining lease renewal at your chromite mines in Sukinda in Orissa
It is under process.
At what price are you importing coking coal currently and what kind of price trend do you see in the year ahead
Globally, coal prices have witnessed a decline due to stagnant demand in major markets and an overall decline in commodity prices.We expect prices to remain around current levels in the near term.
In the light of the problems facing the sector, are you looking at some kind of capacity expansion initiatives
The steel market in India has been showing healthy progress for a number of years now, and we expect this to continue. The brownfield expansion at the Jamshedpur plant aimed to increase its crude steel capacity from 6.8 mtpa to 9.7 mtpa. The 2.9-mtpa expansion covers the entire gamut of its operations, starting from augmenting mine capacity to introducing the latest technologies in steel manufacturing.
Capacity installation and expansion was successfully completed by the end of the final quarter of 2012-13. In addition to this, the commissioning of the Kalinganagar plant will also add to the overall capacity.