Steel Insights April 2023

CONTENTS

17 Imported ferrous scrap offers remain slow

18 Pig iron production down 24% y-o-y in March

19 Sponge iron production up 15% in February FY23

20 India Febr uary crude steel production remained flat

21 Tranche 7 offers 1 coking, 95 ther mal coal blocks

28 Steel PLI pacts signed with 27 project developers

30 Integrated steel players post record output

31 Odisha iron ore offers remain stable

32 Seaborne coking coal offers drop in March

33 FY23 ends on positive note for Motown

35 Iron ore handled by major ports down 11% till February

36 Railways’ iron ore handling down 8% till February

37 Global crude steel output down 2% in February m-o-m

40 SAIL shows best-ever operational per formance in FY23

43 AM/NS India eyes capacity expansion to 20 mtpa in next phase

45 Jindal Stainless secures stake in Indonesia Nickel reserve

46 JSPL Angul expansion to strengthen presence in flat segment

48 MAN Ind sets up ERW API grade Pipe plant, enters stainless steel 51 Corporate Update 53 Government

23

FEATURE

Affordable tech, local manufacturing to drive green H2 adoption

Call for competitive Renewable Energy pricing.

6

COVER STORY

Make-in-India push to green steel

A look at how government and industry turning steel greener and sustainable.

25

FEATURE

Steelmakers eye PCI coal as capacity set to rise via BF-BOF route

SAIL looks to broaden PCI coal sourcing

38

INTERNATIONAL

BHP ties up with partners for electric smelting, carbon capture

Signs CCU pilot pact with HBIS of China.

42

CORPORATE

RINL seeks partners to sell steel against raw material supply

Selected party can fund working capital and take steel supply.

Make-in-India push to green steel

Sumit Maitra

The Union Steel Ministry has initiated the process of defining the roadmap for green steel in India with the setting up of 13 task forces which will focus on various aspects of green steel production, including raw materials, technology, and policy frameworks.

The move is expected to drive the development and adoption of sustainable steelmaking practices and technologies in India. This will not only help to reduce the carbon footprint of the steel industry but also contribute to India’s efforts to combat climate change.

The decision was taken during the recently-held meeting of the Advisory Committees for Integrated Steel Plants and Secondary Steel Industry held under the Chairpersonship of Steel Minister Jyotiraditya Scindia.

“Held a productive meeting with the Advisory Committee of Integrated Steel Plant players to deliberate on the roadmap

for green steel, diversification of coking coal sources & branding made-in-India steel. We are committed to ensuring Aatmanirbhar & quality production of steel,” Steel Minister Jyotiraditya Scindia said after the meeting.

The minister is of the view that the world’s second-largest steel producer needs to become most responsible through green steel adoption and asked the committee to work together to define the way forward for the industry.

“We are committed to promoting sustainable steelmaking practices in India. The establishment of these task forces is a significant step towards achieving this goal,” said Scindia. “We believe that the adoption of green steel production practices will not only benefit the environment but also lead to the creation of new jobs and economic growth,” added the Minister.

The Minister highlighted the contribution of the steel sector to carbon emissions and emphasized the need to

move from being a hard-to-abate sector to a low carbon emission sector. The Minister mentioned initiatives such as Green Steel and Green Hydrogen Mission, which could lead to carbon neutrality.

He also mentioned that the circular economy in the sector could be boosted as approximately 25 million tons (mt) of scrap are used in the steel sector, which could be increased in the years to come.

“Scrap availability in India may see some improvement after the implementation of private vehicle scrappage policy from April 2023. Setting up recycling units to securities future raw material (ferrous scrap) is an imperative.

For this, there is need for advocacy on incentivising higher scrap usage in primary steel making route by Science-based Target Initiative (SBTi),” Somesh Biswas, Chief, Sales Planning, Tata Steel

Steelmakers eye PCI coal as capacity set to rise via BF-BOF route

perspective as the coal can be used directly in the blast furnace in the pulverized form, a direct one-to-one replacement of the costly coke. We have also successfully blended PCI coal with imported coal by up to 5 percent to get the required property in coke ovens,” Arun Kanti Bagchi, Director (Projects) and Additional Charge of Director (Operation), said at the Indian Coal Market Conference 2023.

With very limited mining resources of steel-making grade coking coals in India, there is huge dependency of nearly 90 percent on imports.

India was the largest importer of both coking coal and low ash metallurgical coke in 2022:

While import of coking coal at 56 mt remained more or less stagnant, import of PCI Coal rose 7 percent year-on-year in 2022 to 13.4 mt shipments of met coke jumped 36 percent to 3.36 mt.

“There is a need to increase coal injection (PCI) and reduce coke rate in BF,” said said S K Haldar, consultant, Rawmet Resources Pvt Ltd at the conference.

SAIL looks to broaden PCI coal sourcing

Steel Authority of India Ltd (SAIL), the largest Indian steel producer, in a bid to broaden its supplier base, has floated Expression of Interest (EOI) from overseas

Steel Insights Bureau

Absence of quality coking coal from domestic sources and limited sources of coking coal in the international market have put the focus of steelmakers on Pulverized Coal Infection (PCI) in blast furnace as more and more capacity addition in steelmaking is happening through the BFBOF route.

Higher grade thermal coal pulverized and charged into blast furnace reduces consumption of coking coal in a corresponding manner.

“PCI is important from steelmakers’

BHP ties up with partners for electric smelting, carbon capture

Electric Smelting

Furnace technology

ESF is capable of producing steel from iron ore using renewable electricity and hydrogen replacing coking coal, when combined with a direct reduced iron (DRI) step.

Estimates show that reductions of more than 80 percent in CO2 emission intensity are potentially achievable processing Pilbara iron ores through a DRI-ESF pathway, compared with the current industry average for the conventional blast furnace steel route.

The technology allows for greater flexibility in input raw materials, addressing a key barrier to wider adoption of other lower CO2 emissions production routes, such as use of electric arc furnaces which are designed for scrap steel and high grade DRI only. The ESF also has the potential to be integrated into a steel plant’s existing downstream production units.

Iron ore mining major BHP and global engineering, project management and professional services firm, Hatch, have signed an agreement to design an Electric Smelting Furnace pilot (ESF) plant in in Australia.

“The facility will aim to demonstrate a pathway to lower carbon dioxide (CO2) intensity in steel production using iron ore from BHP’s Pilbara mines for BHP’s steelmaking customers,” the company said.

The small-scale demonstration plant would be used to collaborate with steel producers and technology providers to generate and share learnings with the aim of accelerating scale up of ESF plant designs.

The pilot facility would be intended to test and optimise production of iron from

the ESF, a new type of furnace that is being developed by leading steel producers and technology companies targeting low CO2 emission-intensity steel.

“The pilot facility will enable deeper and more accurate insights into the performance of this technology for converting iron ores into molten iron and steel. Planned test programs will help de-risk further investment in commercial scale projects, thereby complementing development plans of BHP’s steel customers. This scale-up approach has been utilised by other industry demonstrations such as Sweden’s HYBRIT project,” BHP said.

BHP and Hatch will assess several locations in Australia for the proposed facility based on supporting infrastructure, technology skills and the availability of local partnerships to build and operate the facility.

BHP’s Chief Commercial Officer, Vandita Pant, said: “We see the ESF process as a critical breakthrough in significantly reducing the carbon emissions intensity of steel production and one that provides an opportunity for iron ore from our Pilbara mines. The steel industry has identified the ESF as a viable option to use a wider range of raw materials and steel companies globally are looking to build commercial-scale ESF plants as part of their CO2 emission reduction roadmaps.”

BHP’s Group Sales and Marketing Officer, Michiel Hovers, said: “Hatch is a key partner in carbon emissions reduction initiatives across the world. We are pleased that we can collaborate with Hatch, alongside BHP’s existing customer and research partnerships, to further progress the development of pathways towards a lower GHG emission footprint for the steelmaking industry. The ESF technology is very exciting

Steel Insights Bureau

BHP’s Chief Executive Officer, Mike Henry and Chief Commercial Officer, Vandita Pant with officials of China’s HBISGroup

RINL seeks partners to sell steel against raw material supply

Steel Insigh

Rashtriya Ispat Nigam Ltd (RINL) has come out with an innovative business model to get into sourcingcum-supply pact with partners which will fund its working capital without cash outgo.

“RINL is looking to partner with companies having interests in steel and steelmaking raw materials and invites business proposals for supply of steel from RINL. Potential partner may participate by way of supplying one or more key raw materials like coking coal /BF coke, iron ore and, in turn, take steel products as per mutually agreed terms and conditions. Potential partner can also fund working capital and, in turn, take steel products as per mutually agreed terms and conditions,” RINL said in an Expression of Interest floated recently.

RINL would engage with potential partners to evolve a business model and finalise related terms and conditions, it added. RINL has been finding difficulties in sourcing key steel-making raw materials and the model, if successfully implemented, may resolve the crisis, industry watchers said.

Eyes improved performance in FY24 RINL expects positive performance in

the current financial year. “With lessons learnt from this difficult year and with the determination of RINL collective our organisation can turn Profit After Tax (PAT) positive in the 1st quarter of FY24,” Atul Bhatt, CMD, RINL, said while addressing the RINL collective on April 1.

“FY23 has been the most difficult year due to the multiple challenges at multiple fronts. But because of the dedicated efforts of the team RINL we could overcome the challenges,.” He added congratulating RINL collective.

Giving an update on the forged wheel project, he informed that Preliminary Acceptance Certificate (PAC) has been issued for the plant at Rae Bareli and very soon the production will be ramped up to 55,000 wheels to meet the demand from Indian Railways for high speed trains.

“In the area of raw material securitisation, we had taken several initiatives, with timely intervention from the Ministry of Steel. We increased usage of Indigenous coals in the blend and advance payment from customers was incentivized,” he said.

“Odisha Mineral Development Corp, (OMDC), the RINL’s subsidiary, could achieve significant progress towards resumption of mining operations. This

would not only provide raw material security to RINL but also provide income in the form of dividends,” he added.

Appreciating the works collective for maximizing the production within the available resources, Bhatt said, “On the operations front, we have successfully sailed through the most difficult year in the history of the Company. Within the saleable steel production of about 13,000 tons/day, we have maximized the finished steel production to about 12,500 tons/day. For the year as a whole, Hot Metal production from 2 blast furnaces, finished steel production from all the expansion mills and high-end value steel production are the best for any year since inception.”

CMD Bhatt congratulated marketing collective for their multiple initiatives and commercial skills like advance payments from customers etc. to secure our share in the market amidst the toughest competitive business environment. He also applauded the financial acumen of the finance collective in the management of cash flow and treasury management.

DK Mohanty, Director (Commercial), AK Bagchi, Director (Projects) and other officials also attended the meeting.

AtulBhatt,CMD,RINLaddressingthegatheringattheMPHall,Ukkunagaram

Jindal Stainless secures stake in Indonesia Nickel reserve

JSL Managing Director Abhyuday Jindal and other officials discussed the futuristic requirements of the sector, challenges faced in indigenisation and the Defence Research and Development Organisation’s (DRDO) vision for domestic manufacturers.

During the conference, Scientific Advisor to Defence Minister, Dr G Satheesh Reddy said, “I would like to congratulate Jindal Stainless for playing an active role in India’s highly paced developmental journey. The organization’s efforts in sectors of automation, quality consciousness and safety at workplace are highly appreciated. Materials and Manufacturing sectors are the pillars of Atmanirbhar Bharat and hence there is a need to identify the gaps in these se ctors and fill them with innovative technological solutions.”

Steel Insights Bureau

Jindal Stainless Ltd (JSL) has become the 1st Indian firm to secure a stake in a Nickel reserve abroad with the signing of a collaborative agreement with Indonesiabased New Yaking Pte Ltd, a Nickel pig iron company to acquire a 49 pecent stake for `1,290 crores.

The move will give JSL a strategic stake proving long-term availability of nickel through development, construction and operation of a Nickel Pig Iron (NPI) smelter facility located in an industrial park in Halmahera Islands, Indonesia. Pursuant to the agreement, JSL will acquire a 49 percent equity interest for a consideration of around `157 million.

“The strategic collaboration offers benefits of backward integration as JSL would have stake in the business of NPI. The facility is planned to be commissioned within 2 years, with an annual nameplate production capacity of up to 200,000 tons of NPI with average 14 percent Ni content.

“This is the first-ever strategic partnership entered into by an Indian company for securing stake in nickel reserves globally as India is deficient in nickel ore,” the company

said. Jindal Stainless MD, Abhyuday Jindal said, “This path-breaking collaboration will enhance value for stakeholders with JSL acquiring a stake in nickel supply to create raw material security for its stainless steel operations. This acquisition will usher a sharper competitive advantage to JSL in Indian and international markets.”

The nickel price trend has been a key factor in stainless steel business across the globe. Further, geo political issues, logistical hurdles, pandemic-induced constraints etc. often affect the demand-supply dynamics of nickel, thereby increasing the cost and uncertainty for its user industries such as stainless steel. Currently, JSL meets bulk of its nickel requirement through stainless steel scrap and NPI/ ferro nickel and this collaboration will secure an ample supply of NPI for JSL.

JSL eyes higher usage in defence sector

JSL recently hosted a conference on strategic defence materials in partnership with the Ministry of Defence and the Indian Army in Hisar.

In the presence of Scientific Advisor to Defence Minister, Dr G Satheesh Reddy,

Commenting on the occasion of the first technical conference of its nature, Jindal said, “JSL is committed to empower the government’s vision to ‘Make in India for the world’ and bring the manufacturing of worldclass defence material requirements back to the nation. We are confident that Bharat has the right skills and determination to become Atmanirbhar in the defence sector and such conferences will pave the way for smoother industry-government collaboration.”

JSL’s Defence Business Head, C P Agrawal added, “The right policy reforms aimed at banning or reducing imports in certain categories, such as armour steel, will help eliminate the problems of misdeclaration of imports, and the subsequent quality and safety issues arising from the usage of lower quality material for strategic applications in the Defence and Aerospace sector. This is the need of the hour to promote indigenous manufacturing in this sector and make India the preferred supplier for the world. ”

Jindal Stainless is giving impetus to indigenous manufacturing in the defence and aerospace sector through its business unit, Jindal Defence and Aerospace (JDA).

JDA started supplying material to DRDO in FY19 for their missile programme.

JSL offers specialty steel for missile and satellite launch vehicle applications, submarine rocket launchers, armour steel, and high nitrogen steel.

AbhyudayJindal,ManagingDirector,JSL,duringaconferenceonstrategicdefencematerialsinpartnershipwith theMinistryofDefenceandtheIndianArmyinHisar.

JSPL Angul expansion to strengthen presence in flat segment

Steel Insights Bureau

Jindal Steel & Power Ltd (JSPL) is getting transformed into a flat steel major with its expansion project.

“The Angul capex program will help JSPL increase the proportion of flat products making it a flats heavy player similar to JSW and Tata Steel. Increased proportion of flats will also help improve margin profile given flats offer higher margins vs longs,” JM Financial said in a report on JSPL.

JSP is pursuing an ambitious capex program amounting `24,000 crore over FY22-27. The capex program primarily comprises Angul expansion which will increase crude steel capacity from 9.6

million tons per annum (mtpa) in FY22 to 15.9 mtpa by FY25 and expenses towards 1,050 MW power plant acquired from Monnet Power.

“The Angul capex is a low-hanging fruit offering low-cost, short-gestation and valueaccretive brownfield expansion. The ongoing expansion plan would a) increased proportion of flat products b) reduce mismatch between finished and crude steel capacity c) Cost efficiencies to aid margins,” JM Financial said.

Long products provides pricing stability

So far, a significant proportion of value-added steel have been in the form of long products

that have demonstrated less susceptibility to cyclical price movements.

Scale-up of operations and the emphasis of the management on high-margin products with a significant proportion of value-added long steel products has encouraged rating agency Care to revise its rating outlook to Positive from Stable.

“The company is largely into long products and specialty grade flats, where the threat of imports is lesser. Besides, the company has established itself as one of the preferred suppliers of rails (including specialty rails) to the Indian Railways and its controlled entities, including the Dedicated Freight Corridor Corp of India Ltd (DFCCIL) and metro projects. JSPL has the capability to manufacture one of the longest rails in India,” Care said in a release.

“During 9 months of FY23 (AprilDecember), the crude steel production and

“The Angul project’s capital expenditure program will help Jindal Steel & Power Ltd. increase the proportion of flat products making it a flats heavy player similar to JSW and Tata Steel. Increased proportion of flats will also help improve margin profile given flats offer higher margins vs longs.”

JM Financial

NaveenJindalinspectingprogressofAngulexpansionproject