Crude steel production: trend and projection
India, fourth largest producer of crude steel in the world, witnessed a growth at CAGR of 7.7% during the eleventh five year plan (2007-12). With massive plans to increase the capacity addition in the twelfth five year plan (2012-17), it is projected that crude steel production would grow at a CAGR of about 11.3%. Crude steel production is estimated to touch 125.9 MT by 2017, with total production capacity to reach 139.9 MT.
Steel consumption: fueled by infrastructure growth
Although India has witnessed a substantial rise in the steel consumption, growing at a CAGR of 8.8% during FY2007-11, still it is very low – only 57 kg per capita against a global average of 214.7 kg in 2011. However, with the increasing steel demand from prime sectors – manufacturing, construction & infrastructure and real estate – the demand is likely to touch 107.01 MT by 2017.
Raw material supplies: is india self sufficient?
For the Indian steel industry to be competitive at global level, it requires to have reliable and economical supply of raw materials, especially of coking coal (India has only 5.3 billion tons of coking coal reserves). Another raw material input iron ore is not an area of worry as India has reserves of almost 28.52 billion tons. What is required is latest technology and investment for making an effective use of iron ore fines to meet increasing steel production capacity.
Infrastructure issues: bottlenecks & the way forward
Highly fragmented Indian steel industry faces daunting challenges due to lack of adequate infrastructure to transport raw material to production site, causing huge delays in supply. It is estimated that the industry will require over 400 MT of bulk handling capacity and road, port and rail infrastructure (almost a two fold increase) by FY2017 and for this an amount $1 trillion is needed to be invested in the infrastructure sector during 2012-17.
