January 2017 (108/2017)

THE INDIAN INSTITUTE OF METALS - DELHI CHAPTER NEWS LETTER ISSUE NO. 108/2017 VOL. CVIII “MONTHLY” January 2017 K L Mehrotra - Chairman, Delhi Chapter | S C Suri - Editor-in-Chief (IIM-DC Newsletter) In The Issue ¾ India – An Emerging Leader in Steel ¾ The Challenges for Make in India and role of scientists by Prof Hem Shanker Ray ¾ Shining years ahead for Indian Steel Industry by Shri K K Mehrotra, Former CMD, Mecon Ltd ¾ Global Steel Market ¾ Make in India ¾ Indian Steel Plants ¾ Global Iron and Steel Scenario THE INDIAN INSTITUTE OF METALS - DELHI CHAPTER ¾ JSW Steel – Now India’s Largest Steel Producer ¾ Many national & international news items VIEW OF AUDITORIUM OF DELHI CHAPTER Published By The Indian Institute of Metals – Delhi Chapter Jawahar Dhatu Bhawan, 39, Tughlakabad Institutional Area M B Road, Near Batra Hospital, New Delhi-110062 Tel: 011-29956738, Telefax: 011-29955084 E-mail:[email protected]; Website: iim-delhi.com For Private Circulation only ISSUE NO. 108/2017 VOL. CVIII “MONTHLY” JANUARY 2017 Offering you a full palette of innovative stainless steel Chemical & Petrochemical Food & Drinks Process Industry Water Transportation Architecture, Building & Construction Solar Energy Water We are the global leader in advanced materials, with our heritage going back over 100 years to the very invention of stainless steel. We are in a unique position to work closely with our customers and partners around the world, to create materials for the tools of modern life. We believe in delivering best in product quality and technical expertise while becoming even better at customer orientation, speed and reliability. Outokumpu wakes every day with the mission to make its long lasting materials as sustainable as possible, because our goal is a world that lasts forever. [email protected] Outokumpu.com OFFICE BEARERS OF DELHI CHAPTER OF IIM Chairman Members Mr. K L Mehrotra Mr. S C Suri Vice Chairman Mr B D Jethra Mr. V C Singhal Mr. A C R Das Mr. P K Chatterjee Mr. K K Mehrotra Hon. Secretary Mr. G I S Chauhan Mr. Manoranjan Ram Mr. Deepak Jain Hon. Jt. Secretary Dr Arvind Bharti Dr. Vipin Jain Mr. Jai Uppal Mr. Gautam Bhatia Mr. Deepak Vaidya Mr. N K Kakkar Mr. Subba Raj Hon. Treasurer Advisory Committee Mr. N Vijayan Mr. B R Thukral Hon. Jt. Treasurer Mr. P N Shali Mr. Navneet Singh Gill India – An Emerging Leader in Steel The woes of the global steel industry are one existing 13 mnt in the fiscal starting April 1. too many, and prolonged. With demand and Further, the company will boost production to consumption having taken a strong hit over the 20 mnt by 2020. After this ramp up, SAIL expects past couple of years and meek signs of revival, to produce more of structural steel, which gives progress of steel sector in most countries in the higher margin than its existing product portfolio. world is impeded. These countries are forced SAIL’s sales are expected to go up 10% to 14 to cut down capacities, recede operations mnt in FY17. and lower targets, including China. In the On the same given scenario, India’s big 300 million tonne lines, Tata Steel’s steel production by 2025 target seems mighty Kalinganagar steel ambitious, yet fathomable. plant, JSW Steel’s India’s steel production is growing at an annual expansion to 17 mnt rate of 6% making it the only country where from 12 mnt, Bhushan the future of the steel industry doesn’t appear Steel’s expansion to too gloomy. The good news is that even post 5.5 mnt are major demonetization, the grounds of growth haven’t capacity additions become too shaky. Certainly there is an impact among others to the on transactions and thus on demand and total tally of India’s consumption, but the overall sentiment for the steel capacity. growth of Indian steel industry remains positive. India’s total steel Capacity Expansions production capacity in FY17 stands at 120 India’s aim to become the 2nd largest crude million tonnes. With steel producer in the world is only getting the ongoing projects, stronger by the day. Following Prime Minister the capacity is Narendra Modi’s push on infrastructure expected to reach up spending and the Make in India campaign, to 142 million tonnes India is set to see huge capacity additions by by FY20. the major steelmakers in the coming years. Integration NMDC’s 3 mnt pa Nagarnar Steel Plant Consolidation of the industry has been on The largest state-run iron ore miner, as part the cards for the past couple of years. 2016 of its expansion, value addition and forward saw a host of mergers and acquisitions in the integration plan is developing a 3 mnt pa green Indian steel industry. Forward and backward field steel plant in Nagarnar in Bastar region integration has been sought after as a remedy of Chhattisgarh. As reported on 1st Jan’17, a to save margins, ease operations and to budget outlay of INR 39.64 billion, has been quicken expansions. Tata Steel acquiring BRPL provided for NMDC Ltd. NMDC is expected to for its pellet plant in late December last year is carry out load trials at the plant by December an example. In May 2016, JSW Energy agreed 2017, official sources informed. to buy out a 1000 MW power plant owned by JSPL in Chhattisgarh for INR 40 billion. Recent reports suggest ongoing discussions on JSW Energy acquiring Monnet’s 1050 MW coal fired power plant in Odisha at Angul. Domestic steel major SAIL in November entered into a pact with South Korean giant Posco for technical collaboration for operational improvements. Most recently, SAIL is in preliminary discussions SAIL’s Massive Expansion Plans with Nippon Steel & Sumitomo Metal Corp and SAIL, the largest state-run steel producer, is set Kobe Steel on various areas of operations of to increase capacity to 15.5 mnt from the steel plants. 4 4 NEWS LETTER ISSUE NO. 108/2017 VOL. CVIII “MONTHLY” JANUARY 2017 With more high profile mergers and acquisitions to reach 88.74 mnt, up 8.45% from 81.82 mnt in expected in 2017, the Indian steel industry FY16. While production has been increasing and appears to be catching up on the idea of we are in the race to become the #2 producer integration to get rid of debt laden and obsolete in the world, India’s steel consumption is seen capacities to improve production volumes. as a negative parameter in the growth story. India’s per capita steel consumption is yet only Imports & Export 61 kg and needs significant climbing to support The Indian government took heed to the plight the increasing production. The government has of the domestic steel producers facing the planned huge spending in the construction, onslaught of cheap steel import from China infrastructure and railways to increase steel and initiated numerous protective measures consumption. Recently, the Union Minister said to help the industry. MIP, safeguard duty, anti- – Railways alone can consume a million tonne dumping duty, BIS certification helped bringing steel a year, 10% of the country’s total steel cheap steel imports in check. Import declined production i.e. usage of steel in high-speed from 8.17 mnt in 2015 to 6.51 mnt in 2016. In rails and new German LHB coaches made of FY16, total steel import stood at 8.72 mnt, which stainless steel. is expected to decline to 5.33 mnt by the end of FY17. Export increased from 3.8 mnt in 2015 to 5.31 mnt in 2016. In FY16, 3.47 mnt steel was exported. Total export in FY17 is expected to touch 5.82 mnt, up 6.7% from last year. Reforms & Production Measures 2016 was the year of reforms in the Indian steel industry. BIS norms were laid and production of steel adhering to those norms was made mandatory. Import of steel was also restricted to such overseas firms that had acquired the BIS license to export to India. This reform sought Production & Consumption to bring consistency and improvement in steel quality to compete with international standards. In 2016, India beat its previous year’s figures of Further, in an attempt to remove the stigma of crude steel production by over 5 million tonnes. using steel produced by primary steelmakers Total production in 2015 was 90.44 mnt and in government projects and provide equal 95.78 mnt in 2016. Production in FY17 is expected opportunity to all steelmakers, the classification 4 4 5 NEWS LETTER ISSUE NO. 108/2017 VOL. CVIII “MONTHLY” JANUARY 2017 of steelmakers as primary, secondary and the demonetization drive in the medium term integrated was scrapped by the government. In will far out-weigh the short term dip in steel May, the government removed the differential demand. railway freight for transport of iron ore and Q. Where is the demand for steel expected to pellets for domestic use and exports. The reform come from? What could be new avenues for gave much-needed boost to iron ore exports. steel consumption? Various protection measures were put in place A. Indian steel industry is already in expansion by the government in 2016. Anti-dumping duties mode. The older steel plants are being on China, US and other countries proved to be modernized and expanded and newer green great relief from cheap imports. MIP imposed field plants are also coming up with state- on certain steel imports in February last year of-the-art technologies. India has overtaken for a period of 6 months was later extended USA to become the world’s third largest and is currently in place until Feb 2017.

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