India’s finished steel production to decline 10% this fiscal

By: |
February 26, 2021 12:45 AM

But certain decisions have opened the floodgates for stainless steel material to come in from China and Indonesia posing a huge challenge to the Indian steel industry, Vijay Sharma, director, Jindal Steel, said.

Bhaskar Chatterjee, secretary general of the Indian Steel Association, said, a very high demand for value-added steel still remains in India and production of such steel could reduce import dependence.Bhaskar Chatterjee, secretary general of the Indian Steel Association, said, a very high demand for value-added steel still remains in India and production of such steel could reduce import dependence.

India could end up producing 93-94 million tonne (MT) of finished steel in FY 2021, a 10% decline compared to last year’s production, Ranjan Bandopadhyay, executive secretary, joint plant committee, said. At this level of finished steel production crude steel production could be crossing 100 MT this fiscal but steel consumption would remain at 91 MT, he said.

India’s consumption reached 100 MT in FY20, growing at a CAGR of 5.2% between FY16 and FY20. While Icra estimated that steel demand could contract 20% in FY21, Vinay Verma, managing director, mjunction, said that steel production, demand and prices have seen significant recovery as the industry got adapted to new normal in the wake of Covid.

Digitisation of steel industry would play a major role in demand forecasting and could also help in giving key insights that could enable plan manufacturing with the demand in sight. As 100% asset utilisation was key to production cost optimisation, inventory optimisation was equally important, Stayan Jha, assistant vice-president, sales & marketing, JSW steel, said at an mjunction steel markets conference. Lower inventory, while in the process of production, was important since it could impact EBITA by 2-4 %, Akshay Gujral, chief of sales,Arcelor Mittal and Nippon Steel, said.

Ajay Mishra, chief of marketing, industrial products and projects, Tata Steel, was of the opinion that digital play has to go hand in hand with physical connectivity. Digital play could only be useful for supply-chain management. There was no alternative to physical connectivity at the consumers’ point although demand forecasting, analytical forecasting, capacity forecasting and inventory buffers remained crucial to digitisation.

Bhaskar Chatterjee, secretary general of the Indian Steel Association, said, a very high demand for value-added steel still remains in India and production of such steel could reduce import dependence. India is the world’s second largest steel producer but the country’s dependence on imports of speciality steel such as electrical steel, automotive grade steel and steel for specialised use in defence space and nuclear applications is still very high.

But certain decisions have opened the floodgates for stainless steel material to come in from China and Indonesia posing a huge challenge to the Indian steel industry, Vijay Sharma, director, Jindal Steel, said.

According to the Indian Stainless Steel Development Association (ISSDA), India’s apex stainless steel body, if the government didn’t consider withdrawing its revocation of trade remedial duties on importing stainless steel, it would distort the market with subsidised Chinese and Indonesian stainless leading several MSME players to bankruptcy. China and Indonesia provide non-WTO-complaint subsidies to the tune of 20-30% to their domestic steel industry. The government’s reversal of six trade remedies of which three relate to stainless steel has disproportionately impacted the stainless steel sector mostly under the MSME category.

The MSME sector makes about 35% of the Indian domestic stainless steel industry with an installed capacity of 15 lakh tonne per annum. But less then 50% of this capacity is being utilised since the market is brimming with unregulated and cheap imports of Chinese stainless steel goods, KK Pahuja, president, ISSDA, said in a different statement.

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