The Hindu Business Line : India poised to become net importer of steel

Sector trail
Current fiscal production & consumption expected to grow by about 15%
Sector projected to see compounded annual growth of 16% in 11th Plan.
Country has been a net exporter of steel in the last four years.

Our Bureau

Kolkata, Nov. 22 For the first time ever, India is all set to become a net importer of steel in the current fiscal. During April-October 2007, the country imported 3.6 million tonnes (mt) of steel, an increase of 79 per cent over the 2 mt imported during the corresponding period of 2006. Around 60 per cent of the steel imports came from China, Malaysia and Thailand.

Stating this during an interface with newspersons here on Thursday, Mr R.S. Pandey, Secretary in the Union Ministry of Steel, said India had been a net exporter of steel in the last four years. While steel exports were of the order of 4 mt four years ago, in 2006-07 it was 0.5 mt. In the seven-month period of April-October 2007, India exported 2.9 mt of steel.

Mr Pandey said the steel sector was projected to witness a compounded annual growth rate of 16 per cent in the Eleventh Plan period. This was significantly higher than the earlier growth projection of 11 per cent during the Eleventh Plan.

On a growth path

In 2006-07, both production and consumption in the steel sector grew by 13 per cent over the previous year. In the current fiscal, production and consumption were expected to grow by nearly 15 per cent. “The growth in the steel industry has been unprecedented and unanticipated,” he said, adding that the industry was firmly on the growth path.

Capacity utilisation in public sector steel plants was 108 per cent even as the same for the overall industry has been pegged at 89 per cent.

According to him, the production capacity of the domestic steel industry — excluding the proposed projects of Arcelor Mittal and Posco — was set to go up to 124 mt by 2011-12, up from the earlier projection of 80 mt.

In 2006-07, the industry had an installed capacity of 56.80 mt even as the actual production stood at 50.80 mt. In 2006-07, steel consumption in the country stood at 46 mt.

Iron ore status

Mr Pandey said exports of iron ore had gone down during the first six months of the current fiscal compared with the corresponding period of last year. “This indicates that domestic consumption of iron ore is going up,” he said, even as he presented a strong case for setting up more pelletisation capacities in India.

On the proposed merger of Rashtriya Ispat Nigam Ltd with Steel Authority of India Ltd, he said the proposal “has not made any progress”.

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