16 October 2018

Special Focus-Steel

Tough metal

 

India’s steel sector has been one among the key determinants in the country’s growth story. VEENA KURUP writes about the latest trends and technologies expected to soon drive the industry’s growth.

 

Soaring demand from infrastructure and construction activities has made steel one of the key economic sectors on the world map. The importance of steel has mainly been due to the rapidly expanding modernisation process and increasing industrialisation worldwide. As the third largest producer and second largest consumer of steel India has evolved as a key player contributing to the global steel market. So much so that the World Steel Association (WSA) in its recent report has credited India with being one of the very few countries enjoying a globally favourable position despite an unstable market situation. According to WSA the Indian steel market has the potential to survive even a hostile business environment Global experts have applauded the Indian government's, growth driven initiatives like ‘Make in India’, increased spending on infrastructure and commitment to reforms. The sector today contributes about two per cent of the country’s GDP and employs over 600,000 people.

While the Indian steel industry is growing manufacturers are concerned about the need to put reforms into action. Maintaining qualitative and cost competent products and identifying efficient technologies to address the problem of depleting natural resources are the other causes of worry for manufacturers. Thanks to the availability of high-end technologies and knowledge of advanced manufacturing processes, Indian steel manufacturers are today getting more focused on increasing investments to strengthen research and development (R&D) activities.

 

POTENTIAL LEAP
The Indian iron and steel industry was the first core sector to be completely freed from the licensing regime and pricing and distribution controls. Since then, despite its unstable growth performance, the Indian steel sector has succeeded in establishing itself as a ‘resilient market’. According to market consultancy firm CCI Pvt Ltd, the country’s steel production expanded from about 75 MTPA in FY09-10 to about 101.02 MTPA in FY13-14. In FY14-15, the production of total finished steel was registered at 91.46 MT, marking a growth of over 4.3 per cent. A benchmarking achievement by the Indian steel sector was seen in January when the country produced 7.07 MT during the month. This was reported as the fourth highest production level globally by industry experts.

While India falls behind China and is the second largest consumer of steel, it lags far behind the global rankings in terms of per capita consumption for finished steel goods. The other major cause for worry is the falling rate of domestic consumption and level of capacity utilisation. As per the recent report by India Ratings and Research, the domestic steel consumption growth has been declining at a rate of 2.4 per cent since the last two years. A slump in construction activities, capital goods and automobile industries are being pointed out as the major reasons for the decline in consumption pattern.
On the other hand, the rate of capacity utilisation of India’s steel industry fell to 81 per cent in FY15 from 88 per cent in FY10. A similar fall was also seen in the global capacity utilisation patterns, registering a drop to 68 per cent from about 75 per cent in 2013.

According to the Steel Authority of India, Indian domestic prices have registered a steep decline mainly due to the impact of lower priced steel imports especially from China, Japan, Korea and CIS countries. Domestic and international steel market continues to pose challenges to Indian steel makers. Though government’s imposition of safeguard duty has given some relief, the industry still have to bear with low cost imports for some more time and may look for some more support. Dr. A.K. Pujari, Secretary, Government of India, Ministry of Steel, and CMD, SAIL, says, “SAIL is focused on ramping up production from the modernised facilities along with renewed thrust on production of value added steel and cost reduction which will bolster its performance in the remaining period of the current fiscal.”
 

 

TECHNICAL THRUST
Rising demand and increasing market competition backed with the need for sustainable products have today pressurised manufacturers to opt for high-end technologies. One of the key trending factors being increasingly noticed among manufacturers is the launching of the first-of-its-kind high-end technical innovations.

JSW Steel which is a major player in the technology applications claims to be a pioneer in the production of Galvalume® (Aluminium Zinc coated steel) and pre-coated and vinyl coated products in India. JSW was also the first in the country to manufacture high strength and advanced steel products for the automotive segment. “Steel is a versatile and green material. With advancements in technology in India, it has found usages in several sectors. JSW Steel is a pioneer in the use of innovative technology that keeps us ahead of the curve. Not only do we offer the widest product portfolio in India, we also leverage our capability to customise offerings to match customer expectations,” opines Vinay Shroff, Senior VP – Sales & Marketing and Head – Retail, JSW Steel Ltd.

Operating on similar lines is Essar Steel, anotherintegrated steel producer. The company focuses its R&D activities in three core areas – raw materials selection, process improvements and product development. One such initiative executed by the company was Essar Hypermart which caters to the requirements of the SME segment, which normally does not have direct access to mill material. “We use information technology extensively for our operation to ensure consistent quality of its products. We have developed over 300 grades of steel conforming to quality standards of international certification agencies, like API, ABS, NACE, Lloyd’s Register, to name a few,” shares Vikram Amin Executive Director-Strategy & Business Development, Essar Steel India Ltd.

A unique innovation introduced into the country’s steel sector was by Bengaluru based Sunvik Steels Pvt Ltd, a primary steel producer. Leveraging cutting-edge German technology in its manufacturing process, the company recently launched its latest product Readyfix to its portfolio. The product is a downstream cut and bend service that provides customised solution for construction industry. The other noteworthy features of the product is its high energy efficiency and ability to minimise scrap, which is generally created during the steel bending and cutting process. The product is made through fully high-tech automated computerised machines from Italy that cuts and bends steel with absolute precision. ''We look forth to start a new era in steel usage through Readyfix solution, similar to what ‘Readymix’ solution has done for the concrete sector. Readyfix will bring a revolution in the steel industry,” says Vivek Kejriwal, Managing Director, Sunvik Steels Pvt Ltd.

However, according to Tata Steel official manufactures in India still lag and are far behind in terms of products and operating efficiencies. Owing to this situation, considering the need to adopt newer and advanced technologies domestic manufacturers are increasingly installing blast furnaces to increase their productivity and to minimise coke consumption. “To enhance productivity and CRCA with uniform mechanical properties, steel makers are increasingly adopting Continuous Annealing Line (CAL) than the earlier Batch Annealing Furnace (BAF) technology. Also near shape casting by Compact Strip Plant (CSP) for Hot Rolled Coil or a Beam-Blank caster for Structural not only improves yields but also reduces energy consumption substantially,” reveals the Tata Steel official.

 

GROWTH TRENDS
While steps have been taken to check the rising imports of hot rolled coils, the steel industry today is also witnessing large scale imports in downstream categories like cold-rolled and coated steels. Says Amin, “Government needs to closely look into this matter and identify effective solutions in resolving such growth hiccups.” However, he also feels that the decision of the Ministry of Finance to accept and implement the recommendation of Directorate General (DG) safeguards will save the steel industry from distress. “This decision recognises that the surge in imports of hot rolled steel coils at prices lower than Indian steelmakers’ cost of production is a serious threat to the country’s steel industry,” adds Amin. According to Shroff government and stakeholders involved in the country’s steel industry need to work hand-in-hand to improve the country’s skill sets “It is high time now to introduce steel specific curriculums in academia in Architecture, Engineering and Design colleges in India. This would bring a major paradigm shift in the Industry. All stakeholders should come together and do a concerted effort to promote steel as it is a sustainable construction material,” he says.

Improved skill-sets and high-end technologies are expected to substantially benefit the Indian steel industry in sustaining its position in the market.
The other unexplored area, holding immense potential, according to the industry analysts is the country’s rural markets which has been identified by the government as an area of potential.
While India’s steel sector has seen numerous ups and downs, the industry stakeholders maintain an aggressive approach in identifying new growth areas and business strategies intended to sustain economic volaiility.

 




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