In 2014, the world crude steel production reached 1665 million tonnes (mt) and showed a growth of 1% over 2013.
China remained the world’s largest crude steel producer in 2014 (823 mt) followed by Japan (110.7 mt), the USA (88.2 mt) and India (86.5 mt) at the 4 th position.
WSA has projected Indian steel demand to grow by 6.2% in 2015 and by 7.3% in 2016 as compared to global steel use growth of 0.5% and 1.4% respectively. Chinese steel use is projected to decline in both these years by 0.5%.
Per capita finished steel consumption in 2014 is estimated at 217 kg for world and 510 kg for China by WSA.
The Indian steel industry has entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel.
Rapid rise in production has resulted in India becoming the 3 rd largest producer of crude steel in 2015 and the country continues to be the largest producer of sponge iron or DRI in the world.
As per the report of the Working Group on Steel for the 12 th Five Year Plan, there exist many factors which carry the potential of raising the per capita steel consumption in the country. These include among others, an estimated infrastructure investment of nearly a trillion dollars, a projected growth of manufacturing from current 8% to 11-12%, increase in urban population to 600 million by 2030 from the current level of 400 million, emergence of the rural market for steel currently consuming around 10 kg per annum buoyed by projects like Bharat Nirman, Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others.
At the time of its release, the National Steel Policy 2005 had envisaged steel production to reach 110 million tonnes (mt) by 2019-20. However, based on the assessment of the current ongoing projects, both in greenfield and brownfield, the Working Group on Steel for the 12 th Five Year Plan has projected that domestic crude steel capacity in the county is likely to be 140 mt by 2016-17 and has the potential to reach 149 mt if all requirements are adequately met.
The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid developments in the domestic steel industry (both on the supply and demand sides) as well as the stable growth of the Indian economy since the release of the Policy in 2005.
Steel industry was de-licensed and de-controlled in 1991 & 1992 respectively.
Today, India is the 3rd largest producer of crude steel in the world.
In 2014-15, production for sale of total finished steel (alloy + non alloy) was 91.46 mt, a growth of 4.3% over 2013-14.
Production for sale of Pig Iron in 2014-15 was 9.7 mt, a growth of 22% over 2013-14.
India is the largest producer of sponge iron in the world with the coal based route accounting for 90% of total sponge iron production in the country.
Data on production for sale of pig iron, sponge iron and total finished steel (alloy + non-alloy) are given below for last five years:
|Indian steel industry : Production for Sale (in million tonnes)|
|Total Finished Steel (alloy + non alloy)||68.62||75.70||81.68||87.67||91.46|
|Source: Joint Plant Committee|
Demand – Availability Projection
Demand – availability of iron and steel in the country is projected by Ministry of Steel in its Five Yearly Plan documents.
Gaps in availability are met mostly through imports.
Interface with consumers by way of a Steel Consumers’ Council exists, which is conducted on regular basis.
Interface helps in redressing availability problems, complaints related to quality.
Price regulation of iron & steel was abolished on 16.1.1992. Since then steel prices are determined by the interplay of market forces.
Domestic steel prices are influenced by trends in raw material prices, demand – supply conditions in the market, international price trends among others.
An Inter-Ministerial Group (IMG) is functioning in the Ministry of Steel, under the Chairmanship of Secretary (Steel) to monitor and coordinate major steel investments in the country.
As a facilitator, the Government monitors the steel market conditions and adopts fiscal and other policy measures based on its assessment. Currently, basic excise duty for steel is set at 12.5% and there is no export duty on steel items. The government has also imposed export duty of 30% on all forms of iron ore except low grades which carry a duty of 10% while iron ore pellets have a export duty of 5% in order to control ad-hoc exports of the items and conserve them for long term requirement of the domestic steel industry. It has also raised import duty on most steel imports by 2.5%, taking the import duty on carbon steel flat products to 10% and that on long products to 7.5%.
For ensuring quality of steel several items have been brought under a quality control order issued by the Government.
Iron & steel are freely importable as per the extant policy.
Data on import of total finished steel (alloy + non alloy) is given below for last five years:
|Indian steel industry : Imports (in million tonnes)|
|Total Finished Steel (alloy + non alloy)||6.66||6.86||7.93||5.45||9.32|
|Source: Joint Plant Committee|
Iron & steel are freely exportable.
Data on export of total finished steel (alloy + non alloy) is given below for last five years:
|Indian steel industry : Exports (in million tonnes)|
|Total Finished Steel (alloy + non alloy)||3.64||4.59||5.37||5.98||5.59|
|Source: Joint Plant Committee|
Levies on Iron & Steel
This was a levy started for funding modernisation, expansion and development of steel sector. The Fund, inter-alia, supports :
- Capital expenditure for modernisation, rehabilitation, diversification, renewal & replacement of Integrated Steel Plants.
- Research & Development
- Rebates to SSI Corporations
- Expenditure on ERU of JPC
The SDF levy was abolished on 21.4.94
Cabinet decided that corpus could be recycled for loans to Main Producers
Interest on loans to Main Producers is set aside for promotion of R&D on steel etc.
An Empowered Committee has been set up to guide the R&D effort in this sector.
EGEAF – Was a levy started for reimbursing the price differential cost of inputs used for engineering exporters. Fund was discontinued on 19.2.96.
The Growth Profile
(i) Steel : The liberalization of industrial policy and other initiatives taken by the Government have given a definite impetus for entry, participation and growth of the private sector in the steel industry. While the existing units are being modernized/expanded, a large number of new steel plants have also come up in different parts of the country based on modern, cost effective, state of-the-art technologies. In the last few years, the rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up fresh greenfield projects in different states of the country.
Crude steel capacity was 109.85 mt in 2014-15 and India, which emerged as the 3 rd largest producer of crude steel in the world in 2015 as per ranking released by the WSA, has to its credit, the capability to produce a variety of grades and that too, of international quality standards. The country is expected to become the 2 nd largest producer of crude steel in the world soon, provided all requirements for creation of fresh capacity are adequately met.
(ii) Pig Iron: India is also an important producer of pig iron. Post-liberalization, with setting up several units in the private sector, not only imports have drastically reduced but also India has turned out to be a net exporter of pig iron. The private sector accounted for 91% of total production for sale of pig iron in the country in 2014-15. The production for sale of pig iron has increased from 1.6 mt in 1991-92 to 9.7 mt in 2014-15.
(iii) Sponge Iron: India is the world’s largest producer of sponge iron with a host of coal based units, located in the mineral-rich states of the country. Over the years, the coal based route has emerged as a key contributor and accounted for 90% of total sponge iron production in the country. Capacity in sponge iron making too has increased over the years and stood at 46.23 mt in 2014-15.