Comments
Global steel major ArcelorMittal is betting big on its India operations and expects to achieve a production capacity of 8.6 million tonnes per annum (mtpa) by end of 2024. It subsequently plans to increase capacities to 15 mtpa by first half of 2026 in Hazira in Gujarat. The long term expansion plan is to increase capacity to 20 mtpa.
The company is currently carrying out debottlenecking at Hazira and will look at investing an additional $1 billion in automotive downstream capacity and enhancements to iron ore operations.
Steel production in India during H1 2023 was 3.6 mt, up 5 per cent y-o-y. ArcelorMittal’s India operations are through its JV ArcelorMittal Nippon Steel India (AMNS India).
ALSO READ | India to reject call for anti-subsidy tax on certain Chinese steel products
According to its investor presentation, the company intends to commission the continuous galvanising line (called CGL4) in Q3CY23 (July–September) and launch Magnelis products, a high performance steel alloy, in India, which will be used for renewables and solar product markets.
The first phase or Phase 1A programme at Hazira, which is due for commissioning, includes a cold rolling mill (CRM 2) complex and galvanising and annealing line, two blast furnaces, steel shop, ancillary equipment and raw material handling equipment. While the first blast furnace is due to start production in 2025, the second one is likely in 2026.
“AMNS India is a success story and we have been able to ramp up production, improve the quality.... We are (working) on doubling capacity, both upstream amd downstream,” Aditya Mittal, CEO, ArcelorMittal and Chairman AMNS India said, during an investor call, post the company’s results.
The investor presentation mentions that EBITDA includes a $0.7 billion share of JV and associates income reflecting good performance at AMNS India, AMNS Calvert and European investees.
ALSO READ | ArcelorMittal Nippon Steel India ties up with BITS Pilani’s WILP
In addition to the expansion at Hazira, the company plans to commence a long products facility at Paradeep (Odisha) with an annual capacity of 7 mt and a greenfield flat steel plant at Kendrapara, Odisha with an annual capacity of 14 mt.
The 1 GW renewable energy project in India — a part of its decarbonisation strategy — is scheduled for completion in H1 CY24.
Global Environment
A weaker operating environment in the Western world has led the management to moderate its global ex-China steel consumption growth estimates for 2023 to 1-2 per cent (earlier 2-3 per cent) mainly due to subdued demand in the US, Brazil and Europe.
“In India, however, ArcelorMittal, management has kept the consumption growth estimates unchanged at 6-8 per cent,” ICICI Securities said in a report.
According to Mittal, results from India ops are expected to remain “elevated” for most part of the year. The company is also reaping benefits of lower gas price following the re-worked contracts it entered into here, over the last few years.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.