Via AG Metal Miner
The latest steel news reports that Indian steel production is expected to increase throughout 2023. The information comes directly from sector experts and the head honchos of steel companies themselves. So, aside from being welcome, it is an opinion with a fair amount of clout behind it.
According to research agency ICRA, steel demand in India was expected to register a double-digit growth of around 11.3% in FY2023. This came after an 11.5% growth rate recorded in FY2022. According to the research note, steel consumption growth in India remained strong throughout FY2023. This was mainly due to support from the Indian Government’s push for infrastructure-led economic growth.
Moreover, the Government’s capex outlay remains poised to increase by 37% year-on-year (YoY) in FY2024. For this reason, the ICRA revised its steel consumption growth estimate to 7-8% from 6-7%.
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Tata Steel CFO Confident in the Future of the Market
Many steel experts feel that steel consumption in India would only go up due to growth in infrastructure. In an interview with CNBCTV18, Koushik Chatterjee, CFO of Tata Steel, said like the international markets, Indian steel, too, faced many challenges last year. Nonetheless, he predicted that consumption would only go forward from here on.
Unsurprisingly, steel news outlets were quick to run with Chatterjee’s comments. According to him, one of the biggest factors impacting the steel industry was the opening up of China. With that happening alongside increased U.S. stability and European market changes, the low price of steel could be behind us.
Chatterjee also mentioned that we should see more balance in the market and less downward pressure on prices. Experts also feel the volatility witnessed after the Russian invasion of Ukraine a year ago has dwindled. European markets have settled down significantly, perhaps indicating that the worst is over for the steel industry.
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More Steel News: Russia and Vietnam Now Major Suppliers to India
The Indian Government’s Production Linked Incentive (PIL) scheme has also boosted the steel sector. As per data from the Ministry of Steel, there are currently 57 Memorandums of Understanding (MoUs) with 27 companies to produce specialty steel. Under this scheme, the Government of India has approved millions of dollars to aid the steel sector. According to the latest steel news, the PLI Scheme should generate an additional 25 million tons of specialty steel capacity in the next five years.
Meanwhile, fresh data indicates that Russia is now the second largest exporter of semi-finished steel to India. Current estimates place the overall value at U.S. $52 million for April to February 2023. This represents a dramatic rise from a year ago, when that number was a flat zero.
According to this report by The Hindu Businessline, Russia has displaced Japan as the second largest supplier of hot rolled coils (HRC) and strips to the subcontinent. In the 11 months of FY23 0.23 MTS of HRC and strips had been imported from Russia. Again, this number was zero just a year before.The report went on to note that Russian steel shipments to India across all categories went over 500% for that same period. At 0.31 MT, this makes Russian the fourth-largest importing nation after Korea (2.03 MT), China (1.33 MT), and Japan (0.8 MT). Meanwhile, shipments from Vietnam also increased by 300%, reaching 0.29 MT. Because of the surge in exports from Russia and Vietnam, those two nations have actually managed to replace Indonesia and Taiwan as India’s go-to sources of steel products.
By Sohrab Darabshaw
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