Quality steel production is need of the hour

By: | Published: September 29, 2015 12:16 AM

In the first eight months of 2015 the global crude steel production at 1080 MT exhibits a negative growth of 2.3%. India currently at number...

In the first eight months of 2015 the global crude steel production at 1080 MT exhibits a negative growth of 2.3%. India currently at number three in steel production is only 10 MT behind Japan and, of course, way behind China. In another few months’ time the addition of around 10 MT of fresh capacity in the country would enable India to reach the number two position. The higher level of production in Japan is sustained by high exports. China, the largest exporter, sends around 11.5%  of its production outside the country. Increasing level of exports from India must account for a substantially higher component of production from the current level of 7.4% in order to sustain higher volume of production.

In finished steel consumption also India occupies number three ranking after China and USA. The short range outlook by WSA indicates that India would experience the highest rate of growth in steel consumption at 7.3% in the current year and 7.6% in the next year. This is against (-) 3.5% growth envisaged for China in 2015 and (-) 2% in 2016. The consumption in USA is slated to drop by 3% in the current year and rise by a mere 1.3% in 2016. It is interesting to note that in the previous year, imports constituted around 47% of total consumption in USA — including a major component as internal flows from NAFTA —  while import was around 12% of total consumption in India.

As a global producer India’s production of value- added products is lower compared to other major producers like Japan, Korea, Germany, China and USA. This is also reflected in share of continuous casting (CC) in total production. All these countries have, on an average, between 94 to 98% of production coming from CC route, while in India it constitutes only 83%  of total production. This brings us to the need for quality assurance by Indian producers who are required to certify their products not only as per Indian BIS norms but also as per equivalent international standards to gain global recognition.

It is true that many countries like Germany, France, Italy, USA, Indonesia, Thailand, Philippines and Malaysia have imposed stiff internal standards and rigid industrial classifications as non-tariff barriers to restrict imports. Some of the restrictions fall under the category of sanitary and phytosanitary (SPS) as per WTO rules. The fact remains that there are a large group of steel producers in India who are yet to get themselves registered with BIS. For supplies to individual house builders, retailers, contractors, the registration stipulation may not be mandatory and these users may not be fully aware of the need of specifying the production process as per BIS norms and this is another instance of being ignorant of safety and health hazard issues and being unaware of pitfalls of non-conformance to quality standards.

It is unfortunate that any elaborate programme of creating quality awareness on steel use and application in our country is treated as attempts to close down the small and medium enterprises leading to loss of employment and income.

It is also true that a large group of small and medium entities is engaged in production of quality steel and particularly in niche markets of special steel. The number of such enterprises must be encouraged and more quality awareness programmes must be organised to make the users fully aware of the benefits of good quality steel.

India in the next few years is becoming one of the top producers and consumers of steel. The trend is not enhancing the volume of steel consumption but increasing the cost- effective and innovative use and application of steel.

Quality consciousness is more of an attitude and less of costly proposition. The need for change in attitude is equally strong in the users as it is with the suppliers of steel.

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

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