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Govt asks major steel players to use iron ore fines also for steel making

This is aimed at increasing the availability of raw materials at competitive prices.

Published

2 days ago

October 7, 2024

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To increase the usage of available raw materials, the Ministry of Steel has directed integrated steel players to make use of iron ore fines in steel making after its beneficiation. As per sources, the ministry has also suggested that players look at options like acquiring coking coal mines abroad.
This is aimed at increasing the availability of raw materials at competitive prices, they said.
“It has been conveyed to them that iron reserves are limited in the country and to preserve that, players must also use low grade ore through beneficiation process. They can also look for coking coal mines outside India,” the sources said.
Iron ore and coking coal are the two key raw materials used for manufacturing steel through blast furnace route. While iron ore is available in abundance, for coking coal, India remains heavily dependent on imports.
Major players use only high grade ore (lumps), with 65 % and above iron content, to make steel through BF (blast furnace). Fines are low grade ore having iron content or 64 % or less. Beneficiation of low grade ore adds to the overall cost of production.

Related Topics:Coking coal India Ministry of Steel Raw materials

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Steel Ministry to double import duty to counter Chinese steel dumping

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Nomura: Indian steel majors among best-positioned producers worldwide

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Steel Ministry to double import duty to counter Chinese steel dumping

Chinese imports now account for nearly one-third (33%) of India’s total steel imports.

Published

2 days ago

October 7, 2024

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The Indian Steel Ministry has proposed doubling the basic customs duty (BCD) on steel imports from the current 7.5% to 15%, citing a significant surge in imports from China. This recommendation, aimed at protecting domestic steel manufacturers, was detailed in a letter sent to the Finance Ministry by Union Steel Secretary Sandeep Poundrik. The ministry’s internal assessment indicates that Chinese imports now account for nearly one-third (33%) of India’s total steel imports, posing a threat to local industry dynamics.

This is the first time the Steel Ministry has officially acknowledged the sharp rise in Chinese steel imports, which industry experts have labelled as “dumping.” The letter compares India’s situation to similar actions taken by the European Union and the United States, which have implemented safeguards to counter unfair trade practices.

The Ministry’s report highlights that many new steel capacities in the region are driven by Chinese investments aimed at export markets like India. It also raises concerns about steel shipments being diverted from ASEAN nations, particularly Vietnam, which benefits from zero customs duty under the India-ASEAN Free Trade Agreement (FTA).

The letter also points to the misuse of India-ASEAN FTAs, which are being leveraged to route cheaper Chinese steel through South Asian nations. “The current import price of steel products from China is significantly lower than domestic prices even with a 7.5% BCD. Our analysis shows that even if the duty is raised to 12.5%, Chinese steel would still undercut domestic prices,” the Steel Secretary noted.

In September 2024, the average price of hot rolled coils (HRC) in India stood at Rs 48,200 per tonne, while similar steel from China was priced at $462 per tonne, and from South Korea at $500 per tonne, according to market consultancy BigMint.
India has been a net steel importer in FY24, with imports rising by 34% to reach 3.72 million tonnes (mt) in the first five months of the fiscal year (April-August). The trade deficit for this period widened to Rs 149.11 billion, with HRC and cold rolled coils (CRC) being the primary imported categories.

The letter underscores that despite increased domestic steel production, rising imports are displacing locally produced steel, leading to market disruptions.
The Steel Ministry emphasised the need for higher import duties to safeguard domestic investments and prevent potential losses in the sector. Steel, with its significant multiplier effect on GDP (1.4x) and employment (6.8x), is a crucial component of the Indian economy. The letter warns that nearly Rs 75,000 crore of capital expenditure is “under threat” due to disruptions in the investment cycle.

The ministry’s analysis also showed that ASEAN countries currently consume around 75 mt of steel—25 mt from imports and 50 mt from domestic production. With steel production capacities expected to rise from 78 mt to 104 mt in the coming years, Chinese exports are likely to flood these markets and could be redirected to India through FTAs.

The Steel Ministry has urged the Finance Ministry to consider these factors and implement higher duties to protect the domestic steel industry from the growing influx of low-priced Chinese imports.
(Business Line)

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Nomura: Indian steel majors among best-positioned producers worldwide

The report highlights a compound annual growth rate (CAGR) of 4.8%

Published

5 days ago

October 4, 2024

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India’s steel industry is set to expand significantly over the next few years, with plans to add around 23 million tonnes (MT) of crude steel capacity between FY24 and FY27, according to a report by Nomura.

As per the report, the industry is reflecting a compound annual growth rate (CAGR) of 4.8 per cent. The report noted that this growth target is in consistent with the industry’s long-term average growth from FY15 to FY24.

Despite this substantial increase in capacity, experts believe that the Indian steel sector is poised to enter a favorable phase.

“We estimate India’s steel industry will add approx. 23MT crude steel capacity over FY24-27F, at an implied 4.8 pc CAGR, in line with the FY15-24 long-term average” said the report.

The report noted that the steel majors JSW, JSPL, Tata Steel and ArcelorMittal & Nippon Steel should account for nearly 87 per cent of the ongoing capacity expansion. Although the report noted that significant capacity will come onstream over the next three years.

The JSW steel is set to add 7MT by FY28F at a 5 per cent CAGR over FY24-28F, according to the report. While the JSPL is set to add 6.3MT by FY27F at an 18 per cent CAGR over FY24- 27F.

The report also suggested that even under a conservative assumption of 6 per cent CAGR in steel demand through FY27 (compared to 7 per cent over the last five years), capacity additions are still expected to fall behind demand growth during this period. This could lead to an improvement in the domestic supply-demand balance, reducing the need for steel companies to rely on exports for volume growth.

“Improvement in domestic supply-demand fundamentals through FY27F would suggest reduced dependence on exports for volume growth” added the report.

India’s steel companies are well-positioned within the global metals sector, according to analysts. These companies benefit from operating at the lower end of the global cost curve, mainly due to lower labor costs. Additionally, India’s iron ore costs remain competitive compared to other countries, even for non-integrated steel producers.

The future expansion of India’s steel industry is expected to be driven largely by brownfield projects, where existing facilities are expanded or upgraded. Strong domestic demand is another factor that could help reduce the industry’s reliance on exports.

Over the past few years, India’s steel production has grown at a 6 per cent CAGR between 2019 and 2023, far outpacing China’s 1 per cent growth and the rest of the world’s 1 per cent decline. With these factors in place, Indian steel companies are seen as some of the best-positioned producers globally, offering significant growth potential in the coming years.

“We believe Indian steel majors are among the best-placed producers globally” the report noted.

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BSL to establish two greenfield steel units

Phase I will boost production through brownfield development with the current facility.

Published

5 days ago

October 4, 2024

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Bokaro Steel Plant (BSL) has announced plans to set up two Greenfield steel units, each with a production capacity of 5 million tonnes per annum (MTPA). However, the immediate focus is on a brownfield project aimed at increasing BSL’s existing crude steel production capacity from 4.66 MTPA to 7.61 MTPA by 2030.

According to BSL Director-in-Charge Birendra Kumar Tiwari, the first phase of expansion will concentrate on boosting production through brownfield development within the current facility.

“Although we have the potential to establish two Greenfield projects with 5 MTPA capacity each, our current priority is on the brownfield phase. We plan to invest in Greenfield projects after generating sufficient revenue from the brownfield expansion. Over the next five years, BSL will prioritise production growth and use the resulting profits to fund future Greenfield ventures,” Tiwari stated.
(ET)