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India's current steel producing capacity of is ~140 mtpa and the figure is anticipated to rise to 300 mtpa by 2030-31.

Indian Steel Industry Analysis

    Last updated on Dec, 3 2021

As of September 2021, India was the world’s second-largest producer of crude steel, with an output of 9.5 MT. In FY21, the production of crude steel and finished steel stood a 102.49 MT and 94.66 MT, respectively. In FY22, crude steel production in India is estimated to increase by 18%, to reach 120 million tonnes, driven by rising demand from customers. The consumption of finished steel stood at 93.43 MT in FY21.

In May 2021, finished steel production stood at 7.8 MT.

In June 2021, SAIL’s crude steel production stood at 1.30 MT and saleable steel production was 1.27 MT

Steel companies are looking to restart expansion projects on the back of burgeoning steel processes with a capacity addition of 29 MT. Between April 2021 and September 2021, finished steel consumption stood at 49.11 MT.

In FY22, demand for steel is expected to increase by 17% to 110 million tonnes, driven by rising construction activities.

Tata Steel in India is planning to expand its annual capacity from 34 MTPA to 55 MTPA by 2030.

Tata Steel is planning to expand its annual capacity in India from 34 MTPA to 55 MTPA by 2030.

Exports and imports of finished steel stood at 7.75 MT and 2.37 MT, respectively, in FY22 (until September 2021). In April 2021, India’s export rose by 121.6% YoY, compared with 2020. In FY20, India exported 8.24 MT of finished steel.

India’s per capita consumption of steel grew at a CAGR of 4.43% from 46 kgs in FY08 to 74.10 kgs in FY19.

Government has taken various steps to boost the sector including the introduction of National Steel Policy 2017 and allowing 100% Foreign Direct Investment (FDI) in the steel sector under the automatic route. According to the data released by Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000 and June 2021, Indian metallurgical industries attracted FDI inflows of US$ 16.0 billion.

The Government’s National Steel Policy 2017 aims to increase the per capita steel consumption to 160 kgs by 2030-31. The Government has also promoted policy which provides a minimum value addition of 15% in notified steel products covered under preferential procurement.

In 2019, the Government introduced Steel Scrap Recycling Policy with an aim to reduce import.

The industry is also benefitting from the developments happening across various industries. The new Vehicle Scrappage policy will help in reducing the steel prices since the policy enables recycling the materials used in old vehicles. In the healthcare front, major steel producers are now exceeding their production capacities to produce oxygen cylinders for COVID patients. In 2021, Indian Railways is planning to procure over 11 lakh tons of steel from Steel Authority of India Limited (SAIL) for the track renewal and laying new lines across the country.

In October 2021, JSW Steel invested Rs. 150 billion (US$ 19.9 million) to build a steel plant in Jammu and Kashmir and boost manufacturing in the region.

In October 2021, ArcelorMittal and Nippon Steel Corp.’s joint venture steel firm in India, announced a plan to expand its operations in the country by investing ~Rs. 1 trillion (US$ 13.34 billion), over 10 years.

In October 2021, the government announced guidelines for the approved specialty steel production-linked incentive (PLI) scheme.

In October 2021, India and Russia signed an MoU to carry out R&D in the steel sector and produce coking coal (used in steel making).

In June 2021, Mr. T.V. Narendran, CII president and MD of Tata Steel, in an interview with The Telegraph, stated that steel companies have firmed their plans to invest ~Rs. 60,000 crore (US$ 8.09 billion) over the next three years—this is was the biggest private sector investment plan announced in recent times.

In January 2021, the Ministry of Steel, Government of India, signed a Memorandum of Cooperation (MoC) with the Ministry of Economy, Trade and Industry, Government of Japan, to boost the steel sector through joint activities under the framework of India–Japan Steel Dialogue.

In July 2021, the Union Cabinet, approved the production-linked incentive (PLI) scheme for specialty steel. The scheme is expected to attract investment worth ~Rs. 400 billion (US$ 5.37 billion) and expand specialty steel capacity by 25 million tonnes (MT), to 42 MT in FY27, from 18 MT in FY21.

According to CARE Ratings, crude steel production is expected to reach 112-114 MT, an increase of 8-9% YoY, in FY22. This demand will be supported by economic recovery, government spending and enhanced liquidity. The Union Budget 2021-22 has a 34.5% YoY increase in allocation for capex at 5.54 lakh crore (US$ 74.60 billion). The budget’s focus is on creating infrastructure and manufacturing to propel the economy. In addition, enhanced outlays for key sectors such as defence services, railways, and roads, transport and highways would provide impetus to steel consumption.

Note: kg - kilograms

Indian Steel Industry Report (September, 2021)
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