India’s steel consumption remains “buoyant” despite global economic uncertainties and price volatility. Driven by government spending on infrastructure, the country has witnessed an 11 per cent growth in consumption so far this fiscal, says Nagendra Nath Sinha, Steel Secretary.
In an interview to businessline, Sinha talks about steel demand and export outlook, price volatility and Made-in-India branding for steel offerings and effect of imposition of restrictive trade practices like carbon tax in Europe.
What is the steel consumption outlook for India?
Despite the global uncertainties and slowdown trends, Indian steel consumption has increased by 11 per cent so far this fiscal. The rise was driven by the government’s thrust on infrastructure and pick-up in construction activities.
Going forward, the Centre’s capex plans at ₹13.5 lakh crore and focus by State governments on infra development is expected to boost consumption of steel.
The World Steel Association said India’s steel demand is expected to grow at 6.7 per cent for calendar year 2023 and we would like to stick to that at the moment. The trends are also in that direction.
Prices continue to be volatile though. Your comments.
Steel prices are market-driven and there’s always some element of volatility in that.
However, multiple factors come into play here, such as quality, price and availability of the raw materials. Then there are demand and supply factors both in India and abroad.
Indian steel prices are also determined by movement of steel prices at a global level, so even geo-political issues or larger macro economic issues impact the price.
After a brief period of rise in 2023, steel prices are witnessing some cooling off again mid-March onwards. We are keeping a watch on price movement, but demand in India remains strong.
Exports have continued to fall May 2022 onwards. Any outlook of when some stability can be seen there?
Our last numbers say, export were to the tune of 8.2 million tonnes so far this fiscal. Beyond the export duty imposition — which was withdrawn — there are several global factors that have played a role here. Key overseas markets saw a slowdown in demand, which hit numbers. Right now demand push in key markets is flattish.
However, the Indian steel mills have been looking out at new markets while continuing to service traditional ones. There are opportunities for exports in countries like Turkey that the mills are tapping into.
India’s steel makers are quite competitive and dynamic and would make best use of these difficult circumstances. So I am sure that given some time, exports will rise.
Indian steel mills have been complaining of lopsided FTAs with Asian nations impacting them. Any intervention?
If there are specific complaints we take it up with the Ministries concerned and will continue to do so.
Does the proposed carbon tax in the EU impact Indian steel mills?
The carbon tax is a proposal at the moment and there will be adverse effects on Indian steel mills.
We have held meetings with integrated steel producers (ISPs) and the secondary mills to understand their issues and concerns. Concerns have been raised regarding conformity with the WTO regime and the equity. This is going to affect access as this may lead to adverse price structures. There is some divergence of views on the proposed tax among some sections of the Indian steel mills.
We are continuing to deepen our understanding of the new regime and work with Ministry of Commerce and others in this regard.
Some factors like development of the carbon credit market, or integrating working of steel mills with the evolving carbon markets are being looked at and are being worked on. But this is a work-in-progress.
Is the Made-in-India branding for steel happening?
Two corporates, Jindal Stainless Ltd (JSL) and the Steel Authority of India Ltd (SAIL), have been selected in the first round of trials for having ‘Made in India’ branded steel. We are working with the other players to bring them on board. Factors like placement of logo, printing infrastructure, training of personnel, integration of IT systems etc. are critical for the scheme. So, very soon you will see the scheme — Made-in-India branded steel offerings — being rolled out in both domestic and export markets. This is another way in which we would be adding to the visibility and trust in Indian steel.
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