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Home / business / All about Steel Companies in India
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All about Steel Companies in India

By
Ashwanee Kushwaha Published:July 27, 2018
Steel

This post is all about steel companies in india, their problems and Why domestic Steel Companies are not able to compete to foreign companies...

Importance of steel can be understood from following data (in FY 2017-18) relating to eight core sector in India. | Sector | Weight | |:--------------|:--------| | Coal | 10.3 | | crude oil | 9.0 | | Natural gas | 6.9 | | Refienary product | 28.0 | | Fertilizer | 2.6 | | **Steel** | **17.9** | | Cement | 5.4 | | Electricity | 19.9 | **Source :-** [Ministry of Commerce & Industry][1](Government of India) So from above table we can expect that how steel is important for growth and development of any country. > India is [world 3rd largest ][2] producer of crude steel and largest > producer of direct reduced iron (DRI) or sponge. And also **3rd > largest consumer** of finished steel. Steel sector contribute 2% of > Indian`s GDP and 25 lakhs employed in steel/allied sector. India export stood at 7.6 million tons (52.9% more than the previous year) whereas import stood at 6.09 million tons (10.9% more than previous year) i.e India is net exporter of total finished steel in FY 17-18. ## Status of supply and demand of steel globally ## There was a decline in global consumption of steel like in China, Japan, USA, Russia. But in India government`s policy are focusing on infrastructure development and construction sector so steel demand are still rising. But due to glut of steel from mainly China, korea and Japan, domestic companies are not compete to those .By which domestic company are facing stress and some CPSE are in loss making like SAIL. ![ranking of top global steel producer][3] India is expected to become the second largest steel producer in the world by 2018, based on increased capacity addition in anticipation of upcoming demand, and the new steel policy, that has been approved by the Union Cabinet in May 2017, is expected to boost India's steel production. ## Why domestic Steel Companies are not able to compete to foreign companies ## There are various reason, some important reason are following- - As the cost of total steel production depends on the iron ore and coke. But by the order of Supreme Court some of the ore mines were shut down like Goa iron ore mines. And also Karnataka mines and Odisha mines are facing stress, which causes scarcity in iron ore (Even though India is 4th largest iron ore reserve). And also the coke produced in India are metallurgical coke which is of poor quality and contain high ash content. - Though some Chinese companies are also facing the stress but to capture the Indian`s domestic market they are supplying at lower cost. ## Government initiatives ## Government has taken various measure to boost the steel consumption, some important steps are given below:- - Government of India is focusing on infrastructure development and restarting road project to aid the consumption of steel. > The Union Cabinet, Government of India has approved the National Steel > Policy (NSP) 2017, as it seeks to create a globally competitive steel > industry in India. NSP 2017 targets 300 million tons (MT) steel-making > capacity and 160 kg per capita steel consumption by 2030. - Metal Scrap Trade Corporation (MSTC) Limited and the Ministry of Steel have jointly launched an e-platform called 'MSTC Metal Mandi' under the 'Digital India' initiative, which will facilitate sale of finished and semi-finished steel products. - The Ministry of Steel is facilitating setting up of an industry driven Steel Research and Technology Mission of India (SRTMI) in association with the public and private sector steel companies to spearhead research and development activities in the iron and steel industry at an initial corpus of Rs.200 crore (US$ 30 million). ## Way Forward ## - R&D department of every steel industry should focus on cost competitiveness/quality improvement, which may be done through:- - Development of innovative/ path breaking technologies for utilization of iron ore fines and non-coking coal. - Benefits of raw materials like iron ore, coal etc. and agglomeration. - Improvement in quality of steel produced through the induction furnace. ![capacity of top steel companies in india][4] - Development and commercialization of new product. - On imposing Anti Dumping Duty on imported steel (but also have to care the WTO norms). - There needs to be an independent body rather than Government as a regulator for steel industry where there are players from both private and public sector. Government should look at policy issues while implementation and day to day issues should be looked up by an independent regulator covering all the inputs and outputs of steel industry. [1]: http://pib.nic.in/newsite/PrintRelease.aspx?relid=179036 [2]: https://currentaffairs.gktoday.in/india-largest-producer-crude-steel-01201852095.html [3]: https://globalforumonline.com/media/business/top_global_steel_producer.jpg [4]: https://globalforumonline.com/media/business/steel_companies_in_india.jpg

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