The increase
in capex spend in Railways, housing, industrial parks and so on, as
proposed in the Budget, will propel demand for the steel to well above the
anticipated 8 per cent number, says Union Steel Secretary, Nagendra Nath
Sinha. India is a bright spot amidst a gloomy global scenario as far as
steel demand is concerned, he said. In an interview to businessline, he talks about the impact of
Budget proposals on propelling steel demand and the impact of PLI on specialty
steel, among others.
The steel sector achieved its highest levels of production and consumption
during FY24 and the trend is expected to continue during the current
year. For Q1 (April-June), domestic steel consumption was up by
15 per cent y-o-y at 35.5 million tonnes. Domestic
finished steel production increased by 4.4 per cent y-o-y at 34.9 mt. The
Budget will further help increase steel consumption. There will be a 12.5 per
cent increase in effective capital expenditure at ₹15 lakh crore, including
grant-in-aid during FY25. We expect steel demand to surpass 8 per cent
y-o-y in FY25.
India is now a net importer of steel. Your
comments.
India remains
amongst the few bright spots in steel production and demand, globally. China,
the largest steel producer globally is witnessing a weakening of domestic steel
demand for last couple of quarters due to the falling demand from their
property sector. This has pushed the Chinese companies to aggressively focus on
exports. The demand for steel in some other countries too has nosedived and
those countries too are eyeing the export markets. The Centre is
monitoring the domestic and global steel environment for corrective action, if
need be.
Q
Green steel is said to play a vital role for a
push towards low carbon economies. Where does India stand on it?
We are
committed to achieve Net Zero Carbon by 2070. The Steel ministry is
working on a detailed decarbonisation strategy with 14 task forces to help the
government understand how it can respond to the demands to produce low-carbon
emission or green steel. Based on their reports, a roadmap and action plan for
energy transition and decarbonisation has been drawn up. The report will be put
up in public domain shortly.
The Ministry
is encouraging the industry to deploy whatever levers are available currently
for the purpose. For example, MNRE has allocated a sum of ₹455 crore for
piloting use of hydrogen in steel making and has already formulated a
scheme. A consortium-based pilot for H2-based DRI facility is also being
explored. So far six bids have been received.
Further,
future capacity addition in DRI sector is likely to be through hydrogen-based
shaft furnace.
The
decarbonisation strategy of companies includes the principle of carbon
minimisation, carbon avoidance and carbon recycling. The Ministry is planning
to replace Coal-DRI based integrated steel units with gas based units when
green hydrogen is available.
Q
Hydrogen-based steel production techniques -
the funding scheme - did not get many takers. Your comments.
Proposals
received are being examined by the implementing agency, MECON, for future
course of action.
Q
Steel PLI got ₹15,500 crore of investments till
May 2024. What is the update?
A few
companies participating in PLI scheme for specialty steel have begun
production. About 0.4 million tonnes have already been produced in certain
subcategories. Incentive in respect of companies that produced relevant
subcategories in the year 2023-24 will be paid in the current financial year.