Steel Insights, January 2023

16 Imported scrap market remains active 18 Pig iron production up 5% y-o-y in November

India’s November sponge iron production up 11.3%

India November crude steel production up 5.7% y-o-y

Anti-dumping duty on China stainless steel tube extended

China, India to lead met coal impor ts till 2025: IEA

Seaborne coking coal offers rise in December

Domestic iron ore offers rise on demand

Year ends on a high for Motown

Iron ore handled by major ports down 28% till November

Railways’ iron ore handling up 5% in November

Global crude steel output down 6% in November m-o-m

Blastr plans euro 4 billion green steel plant in Finland

Britain approves first met coal project in 30 years

Tata Steel eyes growing weather-resistant steel market

“2023 will be a promising year”: RINL CMD

JSPL acquires assets of Monnet Power

Vedanta among winning bidders for 4 Goa ore blocks

35 | INTERNATIONAL

RECOVERY HOPE IN NEW YEAR

Banking on state spending

Sumit Maitra

Private sector consumption is likely to stay subdued during the rest of FY23 with state spending expected to provide the necessary boost to the economy and steel consumption.

As per the first advance estimates, real GDP is expected to grow at 7 percent in FY23, and for the second half at 4.5 percent.

“A slowdown is expected in all demand components with exception of government consumption spending. Private consumption is expected to decline 0.2 percent year-onyear in the second half, after growing 17.2 percent in first. Private consumption remains slowest to recover to pre-pandemic levels. Fixed investment is expected to slow to 8.4 percent in second half from 15 percent in the first,” rating agency CRISIL said.

All components of services are expected to see slower growth (trade, hotels, transport and communication services.

The production performance of steel sector during the first eight months of the current fiscal (April-November 2022) was quite encouraging.

The domestic finished steel production stood at 78.09 million ton (mt) against 73.02 mt during corresponding period last year which is 6.9 percent higher than the corresponding period of previous year.

The domestic consumption was at 75.34 mt, which is 11.9 percent higher that 67.32 mt in the year-ago period.

Domestic crude steel production stood at 81.96 mt and was up by 5.6 percent over same period last year of 77.58 mt.

Government spending as savior

Government spending is expected to rise by 7.2 percent in the second half of FY23, sharply recovering from a fall of 1.3 percent in the first half.

“The upward revision in nominal GDP has given the government scope to increase fiscal deficit, while maintaining its proportion to GDP at budget target. Given the latest update on nominal GDP, the government can increase fiscal deficit by `97,080 crore, while sticking to Budget target of fiscal deficit at 6.4 percent of GDP. This will help accommodate additional capital expenditure and subsidies incurred this year,” CRISIL said.

Government consumption is expected to pick up (7.2 percent) at the cost of de-growth (-0.2 percent) in private consumption.

Although agriculture continues to grow at a steady pace, a substantial pickup is expected in manufacturing (3 percent) mainly led by favourable base.

“We believe that the next leg of growth would be led by manufacturing as well as services,” said analysts with JM Financial.

Manufacturing growth is seen rising mildly in the second half of FY23 (3 percent against 0.1 percent), as is mining (2.6 percent vs 2.2 percent).

Among the economic indicators that are available for December, manufacturing PMI improved substantially, touching a 26-month high.

Preliminary estimates indicate India’s Economic Activity Indicator grew at a

Capacity utilisation trend in auto sector

much faster pace of 8.1 percent year-onyear in November, compared to 5.2 percent in October 2022 and just 2.1 percent in November 2021, respectively.

“The pace was entirely led by a fivemonth high growth in industrial activity in November 2022, supported by an expected recovery in the index of industrial production,” brokerage house Motilal Oswal said.

“After a prolonged lull, the capex in domestic market has revived in a major way led by cement, sugar, distilleries, biomass, steel and other process-cogen industries,” says Centrum Institutional Brokerage.

“After a prolonged lull, the capex in domestic market has revived in a major way led by cement, sugar, distilleries, biomass, steel and other processcogen industries.” Centrum Institutional Brokerage.

Cabinet approves National Green Hydrogen Mission

The Union Cabinet has approved the National Green Hydrogen Mission during a recent meeting. The initial outlay for the mission will be `19,744 crore, including an outlay of `17,490 crore for the SIGHT programme, `1,466 crore for pilot projects, `400 crore for R&D, and `388 crore towards other mission components.

Ministry of New and Renewable Energy will formulate the scheme guidelines for implementation of the respective components, the government said in a release.

The Mission will result in the following likely outcomes by 2030:

♦ Development of green hydrogen production capacity of at least 5 million tons (mt) a year with an associated renewable energy capacity addition of about 125 GW in the country

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Over `8 lakh crore in total investments

Creation of over 6 lakh jobs

Cumulative reduction in fossil fuel imports over `1 lakh crore

Abatement of nearly 50 mt of annual greenhouse gas emissions

Steel Insights Bureau

China approves Sinosteel Group merger into Baowu Steel

Zimbabwe, Indonesia, and the Philippines. Through its units, the company owns the world’s largest chromium reserves, a key raw material used in stainless steel production.

Consolidation strategy

The planned merger follows a roadmap for the steel sector earlier unveiled jointly by the country’s Ministry of Industry and Information Technology, National Development and Reform Commission, and the Ministry of Ecology and Environment.

The roadmap encourages large local steel enterprises to go for merger and acquisitions to consolidate capacities and create worldclass conglomerates in place of “small, scattered and disorderly” capacities.

The guideline eyes independent steel enterprises in Beijing, Tianjin and Hebei provinces to consolidate operations.

Steel Insights Bureau

Chinese government has approved the restructuring of two state-owned giants in the steel industry. Sinosteel Group Corporation Ltd, a metallurgical and mineral resources developer and processor, will be integrated into China Baowu Steel Group Corp, world’s largest player in the iron and steel industry, according to the State-owned Assets Supervision and Administration Commission of the State Council (SASAC).

In October 2020, it was decided that China Baowu would take custody of Sinosteel. Formed after the reorganisation of the former Baosteel and Wuhan Iron and Steel in 2016, China Baowu has carried out a series of strategic restructuring in recent years.

The steel giant saw its steel output top 100 million tons (mt) in 2020 and registered a record business performance in 2021.

In 2020, China Baowu became the world’s largest steel enterprise as per statistics released by World Steel Association.

According to the data, in 2020, the global crude steel output was 1.878 billion tons (bt), of which China accounted for half of the global steel output.

In addition to China Baowu, there are also six steel enterprises in China, including Hegang group, Shagang Group, Anshan Iron and Steel Group, Jianlong Group, Shougang Group and Shandong Iron and steel group.

According to the world steel statistics 2021 released by the World Steel Association on June 4, last year, China Baowu ranked first in the world with 152.9 mt of crude steel output, 36.83 mt more than ArcelorMittal, which ranked second.

Sinosteel, a major provider of metallurgical raw materials, and manufacturing equipment, suffered a debt repayment crisis in 2014, but managed to become profitable in 2017 after completing debt restructuring.

It owns three listed companies and has the rights to ample mineral resources overseas.

Sinosteel has iron ore, chromium, and nickel resources in countries such as China, Australia, Cameroon, South Africa,

“It is hoped that by 2025, China’s steel industry will form a high-quality development pattern, which features reasonable layout, stable resources supply, advanced technology and equipment, prominent quality brands, strong global competitiveness, and green, low-carbon and sustainable high quality,” the guideline noted.

The strategy will help achieve highquality growth featuring more advanced technology and equipment, stable resources supply, higher level of intelligence, enhanced global competitiveness and reduced emissions by 2025.

Spending on Research & Development will be significantly enhanced with exact numerical control rate of key processes and the digitalization rate of manufacturing equipment strictly adhered to, the guideline noted, adding that more than 30 smart factories will be built by 2025.

Through mergers and acquisitions, China’s steel sector is evolving into three types, a handful of behemoths such as Baowu Steel and Ansteel Group, leaders in their respective niche markets such as Citic Pacific Special Steel Group and Tsingshan Holding Group, and various small- and mid-sized steel mills, according to Fan Tiejun, head of the China Metallurgical Industry Planning and Research Institute.

Fortescue teams up for Net Zero steelmaking in Austria

Fortescue, a global leader in the mining and heavy industries has joined hands with Primetals Technologies, Mitsubishi Corp and leading steel and technology group voestalpine by signing a Memorandum of Understanding (MoU) for designing and engineering an industrial-scale prototype plant with a new process for Net Zero emission ironmaking at voestalpine’s site in Linz, Austria.

The collaboration will also investigate the implementation and operation of the plant.

The new ironmaking process will be based on Primetals Technologies’ HYFOR and smelter solutions. HYFOR is the world’s first direct reduction process for iron ore fines that will not require any agglomeration steps, like sintering or pelletising.

A pilot plant has been in operation since the end of 2021, and Primetals Technologies has run numerous successful test campaigns over the last year including successful trials on Fortescue’s Pilbara iron ore products.

The new smelter technology from

Primetals Technologies is a furnace powered by electrical energy. It is used for melting and final reduction of direct reduced iron (DRI) based on lower-grade iron ores. In that way, it produces alternative green hot metal for the steelmaking plant.

“Game-changing” tech

“Voestalpine has a clear plan to decarbonize steel production with the greentec steel program. An important first step is the incremental shift from the blast furnace route to a hybrid-electric steel pathway from 2027. Over the long term, our mission is carbon neutral steel production using green hydrogen, for which we are already undertaking intensive research into promising breakthrough technologies. With the joint project with Primetals Technologies and Fortescue, we are taking another new path towards achieving the goal of CO2-neutral steel production by 2050,” says Hubert Zajicek, Member of the Management Board of voestalpine AG and Head of the Steel Division.

Dr. Alexander Fleischanderl, Senior Vice President and Head of Green Steel

at Primetals Technologies, adds: “This is a decisive step for the transition to green steel production, and we are very excited to be a key part of it. Our HYFOR technology is a result of decades of work in the direct reduction and hydrogen space. The Smelter is another game-changing green technology we are developing. By combining these solutions, we will enable a sustainable technology for green ironmaking over the long term”.

Fortescue to provide iron ore Fortescue’s main responsibility in the new project is to provide knowledge about iron ore quality and preparation. In addition, Fortescue will supply various iron ores for the new plant.

Fortescue Future Industries (FFI) CEO Mark Hutchinson said the partnership was the perfect alignment of the company’s mining and renewable energy goals: “Fortescue has more than two decades of expertise in the iron ore industry, rising to become one of the world’s lowest cost exporters, now shipping more than 180 million tons of iron ore a year.

Steel Insights Bureau

The new ironmaking process will be based on Primetals Technologies’ HYFOR and smelter solutions. HYFOR is the world’s first direct reduction process for iron ore fines that will not require any agglomeration steps, like sintering or pelletizing.

Shyam Metalics enters stainless sector, commissions steel capacity

Steel Insights Bureau

Shyam Metalics and Energy Ltd (SMEL) has entered the stainless steel sector by taking active steps to acquire Mittal Corp Ltd under Insolvency and Bankruptcy Code (IBC) process. Presently, the matter is pending adjudication.

“The matter is subjudice and shall be resolved in due course. This inorganic growth will witness the establishment of manufacturing footprints in the state of Madhya Pradesh and add capacities of 1,50,000 tons per annum Stainless Steel (SS) / Wire Rod & Bar Mill,” the company said in a release.

“Mittal Corp’s acquisition cost is about `450 crore, and we outbid Jindal Stainless, the competitor for the sick asset put under the NCLT resolution process. The acquisition will enable us to foray into stainless steel and

special products, such as defence materials,” SMEL vice-chairman and managing director Brij Bhusan Agarwal said during a press conference.

Ferro Alloys a key input material for stainless steel is extensively produced by group companies. The government has mandated a minimum 20 percent use of stainless steel in coastal areas which ensures a very stable demand for these products.

Ongoing capex plan

SMEL has already invested `2400 crore out of `3,950 crore existing capex plan of the company in the last two years.

The new investment will also help SMEL bet big on their exports and expand their geographies to newer markets which currently stands at over 40 countries with a contribution of 16 percent to the overall business.

Going forward

♦ SMEL to complete third acquisition expanding both inorganically and organically

♦ To conclude the acquisition of Mittal Corp and further strengthen the metal portfolio by entering the Stainless Steel (SS) / Wire Rod & Bar Mill

♦ Manufacturing footprints to increase with entry into Madhya Pradesh through Mittal Corp acquisition

♦ Aims at expanding existing 8.85 mtpa production capacity to 14.45 mtpa

♦ Capex spending shall grow to `10,000 crores in the next 5 years to meet the organic and inorganic growth plans through internal accruals

♦ To generate additional 10,000 jobs in plants situated in West Bengal and Odisha.

SMEL is also the largest producer of coal-fired sponge iron in the country with a present capacity of 2.1 mt.

Post the planned expansion, the capacity shall be 3 mt of iron making.

SMEL is also amongst the largest producer of speciality alloys and ferro products in the country and has recently commissioned a very specialised 14000 tpa Low Carbon Ferro Chrome Plant which has added to its diversified product basket.

SMEL’s integrated steel production capacity is to further increase from the existing 8.85 mtpa to 14.45 mtpa of which value-added long steel capacity shall enhance to 2 mtpa from the present 1.47 mtpa.

In the next 6 months, the company will also boost the capacities of pellet capacity from 3.6 mt to 6.0 mt, sponge capacity from 2.10 mt to 2.90 mt, billet capacity from 1.47 mt to 2 mt, finished steel capacity from 1.47

Kalyani Group pioneers green steel brand

Assurance India and Saarloha which they can use to claim their Scope 3 emissions reduction.

Saarloha Advanced Materials Pvt Ltd, a Kalyani group company, has launched first-of-its-kind green steel in India under the brand KALYANI FeRRESTA.

“This makes Saarloha the first supplier of Made in India green steel. This major milestone will enable Saarloha to contribute towards the government of India’s commitments to reduce the carbon emissions by 45 percent by 2030, over 2005 levels and to become Net Zero emissions country by 2070,” the company said.

KALYANI FeRRESTA steel products are manufactured in an Electric Arc Furnace using electricity from 100 percent renewable energy sources and more than 70 percent recycled scrap material with zero GHG footprint.

“KALYANI FeRRESTA shall mean the quantity of steel having low CO2e emission of <0.19 * t CO2e per MT of crude steel or <0.35 * t CO2e per MT of rolled steel at manufacturing premises (gate to gate) produced with a specified heat number in Electric Arc Furnace

with electricity consumption from 100 percent renewable energy sources and consumption of ≧70 percent recycled scrap with zero GHG footprint,” the company says in its product brochure.

KALYANI FeRRESTA PLUS has Net Zero GHG emissions per ton of crude steel whereas KALYANI FeRRESTA has very low GHG emission of <0.19 tCO2e per ton of crude steel, the company claims.

“KALYANI FeRRESTA Plus shall mean the quantity of steel having zero Scope 1 and zero Scope 2 emission at manufacturing premises (gate to gate) produced with a specified heat number in Electric Arc Furnace with electricity consumption from renewable energy sources and/or consumption of >=70% recycled scrap with zero footprint along with offset of residual carbon footprint by utilisation/purchase of equivalent Carbon credits to achieve carbon neutral products,” the company says.

Customers purchasing KALYANI FeRRESTA & KALYANI FeRRESTA PLUS steel products will get Green Steel certificates jointly issued by DNV Business

Speaking at the launch, Jyotiraditya Scindia, Minister of Steel and Civil Aviation said, “A sunrise day for India’s steel sector, as India initiates green steel production using renewable energy. The Kalyani Ferresta specialty steel plant will herald a new path for producing steel sustainably with near Net Zero carbon emission. The steel sector is the foundational force for the development of the nation. This initiative will help transform the steel sector’s long-standing identity from a carbon emitting ‘hard to abate sector’, to a reduced carbon emitting-green steelproducing industry.

How is Kalyani reducing emissions?

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Scope 1: Raw Material Change: Increase in Scrap while reducing DRI/Pig Iron Fuel Mix Change: Increase in usage of Bio-Diesel replacing Furnace oil Electrification of Furnaces

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Scope 2: Using renewable energy sources

Scope 3: Identification of several opportunity areas of emission reduction and under implementation

Amit Kalyani, Deputy Managing Director, Bharat Forge said, “We are stepping into the era of sustainable development. At Kalyani group, we are committed to reduce our carbon footprints and KALYANI FeRRESTA is a significant step towards realizing the larger vision of achieving carbon neutrality.”

Steel Insights Bureau

KALYANI FeRRESTA PLUS has Net Zero GHG emissions per ton of crude steel and KALYANI FeRRESTA has emission of <0.19 tCO2e per ton of crude steel.

Minister of Steel, Jyotiraditya Scindia, unveiling the green steel brand of Kalyani Group.