The public sector spending includes huge infrastructural investments, involving a steady supply of steel. SKS Ispat & Power Ltd owner, Mr. Anil Gupta, hints that this may be a turning point for the steel industry as the infrastructural projects all over India are driving up the demand for steel.
Steel is being used to reinforce roads, make water pipelines, make schools, and government centers in remote areas of India. The data released by the Joint Plant Committee of the Steel Ministry displays a consumption of 26.2 million tonne between April and July. This is a 0.5 percent increase compared to last year. The production of crude steel also rose 5 per cent during this period. Expenditure in the public sectors is catching up and steel producers see it as a golden opportunity. Anticipating the trend, some steel producers raised the prices of steel products by almost Rs 3,000 per tonne.
“We’re expecting domestic consumption to accelerate in the decade between 2020-2030,” explained steel secretary Aruna Sharma in New Delhi. “The annual capacity stands at 126 million metric tonne and is forecast to rise to 150 million tonne by 2021, before settling at 300 million tonne”, she added. Mr. Anil Gupta, the promoter of SKS Ispat & Power Ltd, had already predicted this trend. The Indian steel capacity will double by 2027.
By 2022, India might surpass Japan as the world’s second-largest steel producer. However, it is very far from outrunning the largest steel producer, China. In 2016, China produced almost 808 million metric tons of steel, while India produced more than 104 million metric tons. Japan on the other hand, produced over 104 million metric tons.
The only thing that can counter the increase in India’s steel-producing capacity is India’s dependence on special steel imports. To stop this, SKS Ispat & Power Ltd owner suggests creating value-added projects. “Independence can be achieved through value addition and joint ventures with global leaders, increasing tech know-how and skill stockpile of the steel conglomerates”. Depletion of raw materials is also a real threat that can be controlled with sustainable development of the steel sector.
There is another pillar for support for the steel sector. It’s the National Steel Policy. With these useful edicts, the Center is doing everything in its potential to push the steel industry forward. Since a lot of other sectors are dependent on it, the steel industry needs to expand its yield. Luckily, this is happening fast. Companies like SKS Ispat & Power Ltd and Essar Steel are gearing up for the big stack.