Global crude steel production at 1.5 billion tonnes in 2011 is around 97 million tonnes more than the previous year. China (+57) contributed 59% of this incremental growth. South Korea enhanced production by 10.4 million tonnes, US by 5.7 million tonnes, Turkey by 5 million tonnes and South America by 4.5 million tonnes, EU (27) by 4.8 million tonnes and India by 3.9 million tonnes. India remained at fourth position and many believe that it may reach number two by 2015. Last year, India?s crude steel production was 14 million tonnes lower than US (3rd) and 35.4 million tonnes lower than Japan (2nd). Let us examine the possibility of closing this gap by India in the next 4 years.

SAIL would be adding around 10 million tonnes by March 2013 (latest by 2014). Tata would enhance capacity by at least 3 million out of 6 million tonnes at Kalinganagar by 2015 without taking into account capacity augmentation at both Bastar and Jharkhand plants. NMDC plant at Bastar can make available another 3 million tonnes. RINL would give an additional 3.3 million tonnes by 2015. JSW including JSW Ispat would be richer by another 3 million tonnes (including JSW Bengal).

Capacity of JSPL may rise by 3.5 million tonnes at Angul and by 3 million tonnes at Patratu. Essar has just completed 10 million tonnes capacity build-up at Hazira. Electro steel would add another 2 million tonnes at Bokaro.

Monnet Ispat plant at Angul and Visa steel at Raigarh would give 1 million tonne each. From the other medium and minor players, another 5-8 million tonnes capacity addition may be a reality by 2015. Taken together, it would enhance capacity by another 34-38 million tonnes by 2015.

In the next 3 years? time, crude steel capacity in the country, therefore, may reach 115-125 million tonnes. Assuming 90% utilisation of the existing capacity and 85% for the incremental capacity, the production of crude steel may stand at 101-104 million tonnes by 2015.

Crude steel production by US at 86 million tonnes in 2011 at around 77% utilisation puts the capacity at 112 million tonnes.

Assuming a higher utilisation of 80-85%, the estimated production of US may reach 89-95 million tonnes in next 3 years? time. Thus, India may take number 3 position by 2015, next to Japan which has produced nearly 108 million tonnes in last year.

There are a few challenges attached to this scenario. First, Indian economy must perform admirably well to initiate various reforms including important policy measures to facilitate investment in infrastructure and bring back entrepreneurial confidence. This would create an enabling environment for the producers to carry on their investment programmes in augmenting capacity and production of steel. Second, recessionary trend and industrial slowdown in Japan and with some lower intensity in US would continue leading to curtailment of fresh addition in steel capacity or higher capacity utilisation in steel than the present rate. And third, the most critical one, economic growth must drive demand for steel (domestic and exports), at a much higher rate in India than what it does in Japan and US.

The author is DG, Institute of Steel Growth and Development. The views expressed are personal