Rating agency ICRA recently said that even as India’s steel consumption growth remained weak in the current fiscal due to continued weakness in the key end-user industries, “2017-18 points to a favourable demand outlook for the steel sector in the medium-term,” ICRA said.
Indian steel sector is hopeful that the government’s proposed Rupees 3.96 lakh crore investments, budgeted for the current fiscal, in the infrastructure sector would result in substantial increase in steel consumption. According to an IBEF (India Brand Equity Foundation, a Trust established by the Department of Commerce, Ministry of Commerce and Industry) report, “Driven by rising infrastructure development and growing demand for automotive, steel consumption is expected to reach 104 MT by 2017.” Since India’s economic growth is contingent upon the growth of the Indian steel industry, it will be crucial to see whether Indian steel sector can sustain this uptrend for a long period.
Indian crude steel production witnessed 4.6 per cent increase at 8.45 million tonnes (MT) in July’17 as against 8.082 MT during same month a year ago. Finished steel export jumped by 64.2 per cent to 0.770 million tonne (mt) in July compared to 0.469 mt in the same month last year. Import of finished steel also increased by 42.2 per cent at 0.798 mt in July this year compared to 0.561 mt in the same month last year. “India was a net importer of total finished steel in July 2017 but maintained its net exporter status for the cumulative period, i.e. during April-July 2017,” the report said.
Indian steel sector that was under stress due to poor demand from the end-users like construction, automobiles and white goods sectors seems to be finally picking up. According to the data released by Joint Plant Committee (JPC), a unit under the steel ministry, Indian steel industry posted a robust 11 per cent growth in production in 2016-17 at 101.2 MT. SAIL (Steel Authority of India), RINL, Tata Steel, Essar, JSWL & JSPL together produced 57.5 MT during April-March 2016-17, which was a growth of 18.5 per cent CPLY (compared to same period last year); while production for other producers was down by 1.2 per cent. JPC data showed that exports more than doubled during the year to 8.24 MT during the year from 4.07 MT a year ago. Imports, on the other hand, have declined by 37 per cent to 7.42 MT during the year, making India a net exporter of steel.
It will be pertinent to mention here that India is the third largest producer of crude steel in the world after China and Japan. The country is now aiming to grab the second spot. The Indian steel ministry has set an ambitious target of taking the country's steel production to 300 MT by 2030-31 from 100 MT, at present, and is taking various measures to boost the sector. Indian government has also approved the National Steel Policy 2017 in this regard. It has been spearheading the steel sector to boost the production through capacity expansion, upgrading of existing steel mills and state-owned companies stepping in to build new steel plants.
Starting from April, 2015, India has taken a slew of measures to counter predatory imports including raising import duty, imposition of minimum import price (MIP), anti-dumping duty and safeguard duty.