New policy to help, but core sector must use more steel

The National Steel Policy approved by the Cabinet on Wednesday accords preference to locally manufactured steel in infrastructure projects but this can only work if there is an increase in the component of steel used in such projects.

Steel comprises just 10 per cent infrastructure projects in India though internationally the figure is 40-45 per cent. 

According to experts, demand for steel in the country has plateaued and can be pushed up by infrastructure development. 

The policy will focus on increasing the country’s annual steel production to 300 million tonnes by 2025, involving an investment of Rs 10 lakh crore by 2030-31. This will encourage capacity addition, cost-efficient production and facilitate foreign investment.

Steel Minister Chaudhary Birender Singh on Thursday  said the government was hopeful of attracting foreign direct investment through this initiative. 

“The focus on infrastructure-led growth will not only support the demand for steel but will also help us achieve world-class cost efficiencies,” said T V Narendran, managing director, India and South-East Asia, Tata Steel. 

“Once we have more clarity on the raw material policy, we will be in a better position to talk about putting up more capacities,” said Jayant Acharya, director, commercial and marketing, JSW Steel.

Crude steel production in 2015-16 was 89.8 million tonnes and steel imports in 2016-17 were 7.4 million tonnes, up from 11.7 million tonnes in 2015-16. India mainly imports flat products used in the automobile industry.

Imports in March  were down 19.7 per cent over March 2016 but were up 51.8 per cent over February 2017. 

“India emerged a net exporter of total finished steel during March 2017 as well as in 2016-17,” the latest report by the Joint Plant Committee said.  Consumption of finished steel grew 3 per cent to 84 million tonnes over the year-ago period. Consumption in March 2017 at  8 million tonnes was up 2.2 per cent over March 2016 and 13.4 per cent more than in February 2017, the report added.

“With the government thrust on infrastructure, this is one area where we see near-term demand for steel. This is a very good immediate opportunity for the domestic steel industry to capture,” said Ravi Uppal, chief executive officer, Jindal Steel & Power.

The policy is the second initiative by the Centre to revive the steel industry. 

From February 2016 to February 2017, the government had imposed minimum import prices on various steel products to curb cheap imports from China.