Steel Insights, March 2017

EDITORIAL Editor Rakesh Dubey, Tel: +91 91633 48159, E-mail: rakesh.dubey@mjunction.in Deputy Editor Tamajit Pain, Tel: +91 91633 48065, E-mail: tamajit.pain@mjunction.in Editorial Board Dr Abhirup Sirkar, Professor Economics, Indian Statistical Institute (ISI) Jayant Acharya, Director (Commercial & Marketing), JSW Steel Ltd K Ranganath, former CMD, KIOCL Vikram Amin, ED (Strategy and Business Development), Essar Steel Ltd Rana Som, Former CMD, NMDC Ltd News Editor Madhumita Mookerji, Tel +91 85840 08181, Email: madhumita.mookerji@mjunction.in Correspondent Diptoshree Sengupta, Tel + 91 85840 08190, Email: diptoshree.sengupta@mjunction.in Ritwik Sinha, Tel + 85840 08234, Email: ritwik.sinha@mjunction.in Analyst Sanjoy Bag, Tel + 91 85840 08215, Email: sanjoy.bag@mjunction.in Advertising Soumitra Bose, Tel: +91 92310 00232, Email: soumitra.bose@mjunction.in Soudipto Malakar, Tel: +91 91633 48243, Email: soudipto.malakar@mjunction.in Sumit Jalan, Tel: +91 83369 25981, Email: sumit.jalan@mjunction.in Subscription Shweta Gupta, Tel: +91 91633 48045, Email: shweta.gupta@mjunction.in Toll Free No.: 1800 4192 000 1, Press 8 for publication Email: publication.tbss@mjunction.in Design Debal Ray, Sobhan Jas For suggestions, feedback and queries, please write to steelinsights@mjunction.in

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Dear reader, Domestic steel companies are going to face another tough fiscal end as they struggle to maintain toplines. With local demand for the industrial commodity not picking up on expected lines and government protection measures to phase out soon, primary producers could come under pressure to cut product prices going ahead.

If local demand continues to remain sluggish post-March, then it is going to be a big problem for the steel producers. At present, steel demand is subdued but we need to wait-and-watch as the market sense is that traders will de-stock their material by March and pick up fresh stocks April onwards.

Early this month, the government extended by two months (until early-April) the anti-dumping duty on certain cold-rolled flat steel products from four countries, including China and South Korea, to guard domestic industry against cheap imports. It also pulled out the last 19 steel products from the purview of WTO non-compatible minimum import price (MIP) ambit, initially imposed on 173 products in February 2016.

Some traders said demonestisation has also played a role in dampening steel demand mainly in the retail segment.

Since imposition of the MIP in February 2016, producers have raised steel product prices nearly 70 percent which in turn has translated into better realisations.

Going ahead, however, whether producers will be able to raise prices in the same strength needs to be watched. Producers can come under tremendous pressure to lower prices in the coming months, that is, if demand remains the way it is. This would be worse for the industry as consumers may then delay their purchases further in anticipation of deeper cuts.

Weaker domestic demand has led to increased exports of steel to the extent that India is emerging as net exporter of the commodity.

Overall Indian steel demand is still growing between 3-5 percent.

However, in the flat segment the demand is still growing between 5-7 percent. Of course, there has been impact on certain sectors like retail, construction and parts of consumer durables. But, demand in auto, yellow goods, infra and road development is still intact and picking up. Demand from the export market has been strong. Hence Indian steel exports have risen significantly thus bringing in stability to the domestic market.

In the coming year, however, industry expects consumption to pick up significantly. In 2017-18, steel production is expected to remain higher and will be backed by an expected revival in consumption An increase in infrastructure allocation by the government in the Union Budget 2017-18 is expected to drive the pace of construction and infrastructure in the country.

Domestic steel production is expected to remain higher in the coming months as Tata Steel’s Kalinganagar and JSW Steel’s Karnataka plants are to bring additional capacities into the market.

In the current edition of Steel Insights, we again take stock of the power-intensive Indian ferro alloys sector, which is facing tough competition from its counterparts in Malaysia, operating at incredibly lower prices.

Happy reading!

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Steel Insights, March 2017

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Contents

10 | COVER STORY

6 Ferro alloy industry braces for competition from S E Asia

India well-positioned in global chrome alloys market

20 Rational duty structure needed to bring shine back to stainless steel 29 Consumption revival may boost steel output in FY18: CARE 30 IOCL to set up plants for lubricants additives, base oils 32 Dumping duty extended on some products from China 33 India Ratings maintains stable outlook for construction, cement 35 Jan cheer transported to Feb for auto cos 36 India’s iron ore production likely to surge 37 Met coal prices show resilience in Feb

China’s and EU’s appetite for chrome alloys poses good opportunities for domestic producers.

24 | FEATURE

Steel plans to ride Automotive Mission Plan Automotive and construction demand for steel expected to rise from 58 mt to 70 mt by 2020.

38 SAIL achieves record export monthly volume 39 Essar Steel to tap Defence sector

RINL soft-pedals on 11-mt expansion plans

41 Corporate updates 44 Govt expects 7-7.5% growth in steel demand in 2030 46 Global crude steel output up by 1.46% in Jan m-o-m 47 Primetals to modernize continuous slab caster for Baosteel 53 India on Preiser Scientific radar 54 Iron ore handled by major ports rise threefold in Apr-Jan 55 Indian Railways’ Jan iron ore handling up 20% y-o-y

27 | FEATURE

PSU plans entry into flat products segment as part of future strategy.

49 | Opinion

Induction furnaces are the biz of the future Tech innovations centre-stage for success in steel, says Susmita Dasgupta, Jt. Chief Economist, JPC

56 Price data 57 Ferro alloy data

51 | INTERview

58 Production data

Lime waiting for steel’s turnaround

61 Consumption data

Sigma Minerals plans to set up a new modern kiln and hydration plant and is eyeing more mines.

62 Import data 63 Import-Export data Publisher’s Statement

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Address

: Rajarshi Chattopadhyay : Yes : Tata Centre, 43 J L Nehru Road, Kolkata 700071

5. Editor’s Name

: Rakesh Dubey

Dated: March 2017

4 Steel Insights, March 2017

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Cover Story

Ferro alloy industry braces for competition from SE Asia Tamajit Pain

6 Steel Insights, March 2017

Cover Story

T

he domestic ferro alloys industry is bracing to tackle competition from Malaysia and Indonesia, even as it grapples with higher power costs at home to meet growing demand.

While 365,000 ton of extra capacity came into the market in 2016, an additional 180,000 ton is slated to come in during 2017, which is likely to bring down profitability.

Power tariffs in the country are high compared to other ferro alloy producing countries. Non- captive producers are at a disadvantage due to the cross-subsidy in power.

Another challenge facing producers in India is the non-availability of low phos coke.

The anti-dumping duty on Chinese coke has also put an upward pressure on the cost of production. Non-availability of high grade manganese ore also affects the industry, D B Sundara Raman, Chairman, Indian Ferro Alloy Producers’ Association (IFAPA), said on the sidelines of a seminar organised by the Indian Ferro Alloy Producers Association (IFAPA) in Kolkata.

Global demand for ferro chrome in 2016 was 11.2 mt while supply was 11 mt. Some inefficient players were forced to shut shop during last year, leading to a deficit market for the first time in years. This led to an unprecedented price rise. Firming up of prices have led to a number of producers bouncing back into business and supply is also expected to grow by 3 percent to 11.7 mt.

However, demand is expected to increase by 5 percent in 2017 supported by growth in stainless steel. Globally, stainless steel is tipped to grow by 2.9 percent in 2017 driven mainly by growth in China and India. High carbon ferro manganese is, however, likely to see a decline in demand from 4.6 mt to 4.5 mt and supply from 4.7 mt to 4.6 mt. Silico manganese, on the other hand, is expected to see an increase in supply by around 5.6 percent to 14 mt from 13.2 mt, while demand is expected to grow by 2 percent to 13.96 mt from 13.7 mt.

Concern over cheap material from S E Asia

The IFAPA members said the South East Asian countries benefited from the availability of cheap power, which constituted 30 percent of the cost of production.

“Power tariffs are on the higher side in India compared with other ferro alloy producing nations. While power tariffs range from `1.80 to `2.50 per unit in Malaysia, these are around `4.8 per unit to `7 per unit in India,” Sundara Raman, also Executivein-Charge, Ferro Alloys & Minerals Division of Tata Steel, said.

The difference in power tariffs between India and Malaysia is estimated to be around $20 per megawatt hour. While India depends on thermal power, Malaysia relies on a mix of hydro-electric and gas power.

Raman said the Centre should look into the concerns of the producers and consider steps to protect the `23,000-crore industry.

The Director in the Ministry of Steel, Anupam Prakash, said the association could prepare a study on how Malaysian ore was impacting the domestic industry. Steel companies here already enjoy a safeguard duty on hot-rolled coils.

“There are procedures for imposing safeguard measures. The association can make an application with the Directorate General of Safeguards who can then investigate and come up with the recommendations. Any notifications could be accordingly issued,” said Prakash.

Despite high raw material cost (high power tariffs and rising coke prices), several domestic producers still maintain a healthy operating margin. For instance, state-owned MOIL (Manganese Ore India Ltd) recorded an operating profit margin of 48.06 percent in the third quarter, while that of Indian Metals and Ferro Alloys was 30.42 percent.

Indian ferro alloys industry

The Indian ferro alloys industry is worth `23,000 crore and employs around 1 lakh

Challenges faced by ferro alloy makers in India ♦♦ Malaysian and Indonesian manganese alloys upcoming supplies (with lower power tariffs) to bring down profitability. In 2016, 365,000 tons of extra capacity has come into the market and additional 180,000 tons are expected to come in 2017.

The difference in power tariffs between India and Malaysia is $20/ Mwh. ♦♦ Power tariffs in India are on the higher side as compared to other ferro alloy producing nations. Crosssubsidy in power tariffs further put the non-captive producers at a disadvantage. ♦♦ No availability of low phos coke in India is another challenge that the Indian ferro alloy industry is facing and anti-dumping duty on Chinese coke has put an upward pressure on cost of production. ♦♦ Non availability of high grade manganese ore. people. India produces around 3.5 million tons of ferro alloys – 1 million ton of ferro chrome and 2.5 million tons of manganese alloys.

Out of this, the country consumes around 2.3 million tons of ferro alloys and the balance 1.3 million tons is exported, earns foreign exchange of around `8,900 crore.

The ferro alloy industry operates in backward districts/areas and jobs generated by the industry helps to uplift the surrounding society.

Carbon steel outlook

The difference in power tariffs between India and Malaysia is estimated to be around $20 per megawatt hour. While India depends on thermal power, Malaysia relies on a mix of hydro-electric and gas power.

Globally, growth in carbon steel is expected to remain modest at 0.6 percent in 2017.

However, India is expected to grow at around 5 percent, industry sources said.

The recovery expected in 2017 will be driven primarily by emerging markets and developing economies. The outlook for

Steel Insights, March 2017

7

Cover Story HC ferro manganese demand & supply

advanced economies is modest due to high debt levels, low investment levels and low productivity growth.

Steel demand decline in China and Russia in 2016 was less than expected supported by improved demand mainly in the second half (H2) of 2016. China has closed down around 45 million tons of zombie capacities in 2016.

Indian outlook

Controlled fiscal deficit coupled with higher infrastructure spending are likely to boost growth of the steel industry in India. Lower interest rates and tax rates are likely to drive consumption growth.

Downstream industries, ie, automobile and construction, are expected to grow at around 8.5 percent and 5 percent respectively.

Construction spending is expected to grow aided by government investments

in roads, railways, irrigation and urban infrastructure.

Manganese alloys outlook

The manganese alloys industry is primarily being guided by manganese ore prices.

According to IFAPA, high carbon ferro manganese is expected see a decline in both demand (from 4.6 million to 4.5 million tons) and supply (from 4.7 million to 4.6 million tons).

However, silico manganese is expected to see an increase in supply by around 5.6 percent (from 13.2 million to 14 million tons) and that in demand by around 2 percent (from 13.7 million to 13.96 million tons).

Chrome alloys outlook

According to the IFAPA chairman, global demand for ferro chrome in 2016 was 11.2

High carbon ferro chrome demand and supply

8 Steel Insights, March 2017

Silico manganese demand & supply

million tons while supply was 11 million tons. A lot of inefficient players (like IFM, TSKZN etc.) went out of the market last year creating a deficit for the first time after years. This resulted in unprecedented price rise. Consolidation in South Africa also gave power in the hands of South African players to control prices.

According to IFAPA, demand is expected by increase by 5 percent in 2017 supported by growth in stainless steel. High prices have enabled a lot of closed producers to come back into the market. Hence, supply is also expected to grow by 3 percent to 11.7 million tons.

Stainless steel outlook

The stainless steel industry grew by around 7 percent in calendar 2016 driven mainly by growth in China (11 percent).

A prolonged destocking cycle in China in stainless steel and ferro chrome plants in 2015 brought down inventory levels to around 15 days’ worth of inventory at the beginning of 2016. Rising end-use demand in the wake of higher investment in infrastructure (a key stainless steel-intensive sector) grew by 19 percent in calendar 2016 in China.

The real stainless steel demand growth is unlikely to be as strong as in 2016 without further stimulus. Vehicle and construction sectors are set to slow down in 2017 in China. However, a new meltshop capacity of Tsingshan is coming up in Indonesia and which will drive up ferro chrome demand.

Globally, stainless steel is expected to grow by 2.9 percent in 2017 supported by growth in China and India. Growth in developed economies is expected to remain subdued. 

Cover Story

India well-positioned in global chrome alloys market

Madhumita Mookerji

I

ndia’s chrome alloys industry seems to be well-positioned amidst two factors. One is an apparent tug of war that is being played out on the global platform between two key players – the South African suppliers of chrome ore and chrome alloys and the Chinese buyers of chrome.

The second is the tussle between the ore miners and alloy producers in the domestic market.

Globally, the market is thus seeing a significant tussle of dynamics taking place and if neither player relents, in all likelihood, there will be a rollover of prices in March.

An important feature in the chrome alloy market is the exchange rate and how it has played out its role in impacting the ferro

10 Steel Insights, March 2017

chrome markets internationally. The South African rand (ZAR) recently appreciated from 15.05 in December 2015 to 13.24 in February 2017, a 12 percent difference in an industry which is highly dependent on exports. This means the South African suppliers will have to make up in terms of prices. A 12 percent appreciation also means an almost `8,000-9,000 per ton price increase which would be a significant 7-8 cents. “Thus, there obviously has to be a tightening of prices from South African suppliers,” observed an industry source.

Conversely, the yuan has appreciated from 6.45 in December 2015 to 6.87 in February 2017, making imports a little more feasible. “So there will always be a tussle between South African and Chinese players when they have to buy chrome ore or coal.

We have seen a little strengthening of the Indian rupee but more importantly the ZAR has significantly appreciated which is going to give a tough time to the South African exporters,” the source added.

Two years ago, the ZAR had depreciated by almost 25 percent and consequently the South African suppliers had been able to price better.

In the 2.8 mt buying pie of China, South Africa leads, with 2.1 mt, which means both countries have enough muscle to pressure each other.

India’s share in China’s buying is at 0.1 mt and globally at 0.4 mt annually, which means almost 45-50 percent of what it produces is exported.

On the domestic front, there is another tug of war playing out between the chrome alloy producers buying OMC ore and it would be interesting to see how the latter’s price and the buyers’ trend shape up. “The situation is currently delicately balanced between,” said the source.

Said T V Srinivas Shenoy, Chief, Marketing & Sales, Tata Steel: “But given the dynamics of the market in India, we must see what has happened in terms of the economy. The country is projected to grow at the fastest rate among major economies in long to mid-term…”

He added: “Over 70 percent of India’s 3 mt of stainless steel production is the 200 series and when demonetisation happened, this range, which typically goes into utensils etc and the trading here is characterised by cash, saw a dip with many customers shutting down production. But this is perhaps a temporary set-back because the government has put enough emphasis on infrastructure spending, Make-in-India and the Goods and Services Tax (GST) implementation, which will be the next drivers of the industry.”

A 7.7 percent growth of GDP is expected next fiscal and the Chinese story is very similar.

Underpinning this positivity is an overall feeling in the chrome alloys industry that there is robust demand so the supply side players need not worry. The global stainless steel industry, the most prolific consumer of ferro chrome, is here to stay, they say, with no downside expected from here.

The players also expect the government’s push on infrastructure to impact the engineering-procurement-construction

Cover Story (EPC) sector positively, which is going to be good news for the stainless steel and carbon steel industries as well.

However, from the cost side, coke prices are beginning to soften which may take some sheen off an impending price increase for the South Africans already labouring under an appreciated ZAR. In short, Indian chrome alloy players feel good times are not over. Prices are expected to be range-bound in the coming quarter and they feel a sense of optimism that is laced with caution.

Corroborating this, Shenoy told Steel Insights, “Both chrome ore and chrome alloy prices are likely to get rolled over for the month of March, when the next e-auctions are going to be held,” holding a positive price outlook.

“Global ore prices in South Africa and China are at $380-390 per ton. A couple of months back, these were at $400 per ton and this difference is negligible. I would expect a rollover in ore prices globally which would mean domestically ore prices would see a rollover too in the month of March,”

Shenoy said on the sidelines of a ferro alloys conference organised by Indian Ferro Alloys Producers’ Association (IFAPA).

Alloy prices too are likely to get rolled over, he said, adding that these will be stable and remain range-bound. “The market has already seen a rollover in China and that same pattern is likely to be followed in India,” he reasoned.

The rollover is good for the industry, he said, with the market currently poised at around `90,000 per ton.

China, the mover & shaker

Around 2.5 million tons (mt) of chrome ore are needed for every 1 mt of ferro chrome production. While the global chrome ore production in 2016 was at 28 mt, chrome alloys output was at 11 mt. The thumb rule is $1 billion of investment for a million ton but it depends on the value of the dollar in time. Thus, today, the annual turnover of the global chrome alloys industry is around $15 billion. India contributes almost 1.2 mt, which is worth almost `7,000 crore in terms of prices.

The global chrome alloys spread in 2016

Industry analysts say that India is well-positioned currently in terms of the 10 percent global ferro chrome industry.

More importantly, with its capacity to produce “swing” volumes and strategically advantageous location, India can be expected to play a significant role in the global arena in the near future, because of the substantial amount of its underutilised capacity. And this could perhaps be the right place and right time to bridge the gaps that came about last year.

However, this 11 mt of global production spread is interesting with China being the mover and shaker in the pack of producing and consuming countries.

Let us look at the spread of this 11 mt.

The split between ferro chrome and charge chrome production is almost 60:40 with ferro chrome at 6.8 mt and charge chrome at 4.2 mt. China produces a leading almost 4 mt of chrome alloys followed by South Africa at 3.7 mt, India at 1 mt, Kazakhstan at 1.2 mt, Finland at 0.5 mt and others at 0.6 mt. But it would be interesting to note the significant gap between the producing countries and consuming nations and, many Indian players say, herein lies the opportunity for them. China consumes 6.8 mt of chrome alloys, so there is a gap of 2.8 mt. Importantly, the European Union (EU) doesn’t produce any chrome alloys but consumes 1.5 mt and this is again another key global driver of demand.

Thus, around 3.3 mt – the almost 2.8 mt of China’s demand and the EU’s 1.5 mt – are all about the traded volume in India.

China continues to be the global driver of the chrome alloys traded volumes followed

by EU, Japan, Korea and the USA. Interestingly, India is perhaps the only country which produces and is self-sufficient in chrome alloys.

Traded market

The total global traded volume in chrome alloys in 2016 was 5.9 mt. China drives the market with 2.8 million tons of buying, followed by the EU at 1.2 mt, Japan (0.6 mt), South Korea (0.5 mt), the US (0.4 mt) and Rest of the World (ROW) at 0.4 mt. In the 2.8 mt buying pie of China, South Africa leads, with 2.1 mt, which means whatever it produces, it exports out. In fact, among the exporting countries, 63 percent is the leading share of South Africa at 3.7 mt. India’s share

12 Steel Insights, March 2017

Cover Story The global chrome alloys trade matrix in 2016

in China’s buying is at 0.1 mt and globally at 0.4 mt annually, which means almost 45-50 percent of what it produces is exported.

Stainless steel relationship

There is a symbiotic relationship between stainless steel and ferro chrome or chrome alloys and, in the past decade, stainless steel production grew at 4.5 percent and chrome alloys at 5.4 percent compound annual growth rate (CAGR).

Indeed, chrome alloy producers’ fortunes are wedded to stainless steel players, but where has the growth come from?

India is now the second-largest stainless steel producer in the world, at almost 3 mt, nearly doubling volumes from the 2006 levels of 1.8 mt.

China, on the other hand, has quadrupled production from 5 mt to a huge 23 mt in this period and the rest of the world has been stagnating or going down. Thus, the bright spots are actually China, followed by India, though it is a distant second. That is a mighty distance to catch up with but industry players are optimistic that India is on the right growth path.

In the not too distant past of 2001, the total global stainless steel production was 19 mt. China’s contribution to that was almost 0.9 mt and India’s 0.8 mt. Today, the global production is at almost 44 mt and China’s production volume alone is at a whopping 23 mt! The entire growth thus has come about only on account of China in the last 16 years, putting in perspective the country’s enormity of scale, allowing it to dictate the global stainless steel industry.

14 Steel Insights, March 2017

Interestingly, analysts point out that the growth in China’s stainless steel output has happened on the back of its growing chrome alloy industry as well. China’s share has grown from a mere 5 percent in 2001 to 36 percent currently. Despite significant disadvantages China has kept adding to its production capacities of chrome alloys.

India’s share, on the other hand, has grown from 6 percent in 2001 to around 10 percent levels of the global share at present.

Growth pangs for chrome alloys

In the CAGR of around 4.5 percent in stainless production and 5.4 percent in chrome alloys seen in the last decade, China and India have been the bright spots in the industry.

However, analysts feel this growth has not been rewarding as the industry is sandwiched between input suppliers and demanding customers, mainly China and the EU. Chrome ore costs have risen from $150 per ton to $390 by January 2017 globally.

Coke prices went up from $108 per ton

to $320/ton and are now hovering around $265 per ton. All supply issues in the last six months have gone haywire, aver industry players.

There is, however, some good news for ferro alloy producers. Bao Steel and Tisco have rolled over their February prices.

“There doesn’t seem to be too much negative sentiment around that. We are looking at 9,500 RNB in March 2017 in the buying prices of chrome as well as the chrome ore index in China,” said Shenoy.

Also, it is important for players to be able to survive when the market tanks. For instance, when one looks at the estimated production cost in cents/lb in 2016, one realises that the Chinese producers who imported ore at $400 got slaughtered, adding 116 cents to their cost of production.

In India, 82 cents were added, for South Africa, it was 50 cents and for Kazakh, 42 cents.

There is thus very little room for suppliers and buyers to play around with prices and Shenoy aptly said the chrome alloy industry has been sandwiched between input suppliers and demanding customers.

The year that was

The year 2016 was a watershed for the chrome alloys industry and was characterised by three different stories – the first half (HI), second quarter (Q2) and third quarter Q3.

China continued to grow in H1.

One of the thumb-rules has always been that where there is consumption, prices would be sustainable. And players saw that the Chinese growth had been led by actual consumption.

But in Q1 of 2016, when the prices tanked, traders said that Chinese deals had literally stopped at the ports, bringing about a sharp supply imbalance last year.

Stainless steel production

Cover Story Cr alloys production growth

The exchange rate also played its role in impacting the ferro chrome markets globally, as has been already mentioned at the beginning.

Cost structure

In Q2, there had been 15 days’ of stocks at the port which clearly meant there was a scramble for material. And from OctoberDecember, 2016, tender prices started rising, shooting up to over 10,000 RNB per ton.

“In Q3 chrome alloy prices really shot up and most of us were caught napping. But now, there are signs of slowing down,” said an industry player, adding, “But the good news today is that if I am to make a prediction, these are going to taper off at these levels.”

China largely destocked in both chrome ore and chrome alloys at end of Q1. Low tender prices meant less surviving chrome alloy suppliers.

“Yes, indeed, this is what happened last year. Q1 was extremely volatile, then down, then a period of lull followed by a sporadic rise in Q3 of last year,” said an industry source.

India story

The story with regard to India was interesting.

In the period of Q1 and Q2 last year, the prices were almost at `56,000-`57,000 per ton. And then in Q3 there was a sporadic and huge rise. It mirrored the global trend. But there is more to the story. There were lots of parallel activities happening that enabled this unprecedented rise.

“There was the surprise imposition of the export duty in the month of May that really impacted in terms of chrome concentrate which meant the metal had to come back to India. From August 2016, coke prices started moving ferociously upwards. And then there was a huge imbalance between chrome ore and ferro chrome that had to be corrected.

16 Steel Insights, March 2017

And then chrome ore in India got rerated in November – so ferociously rerated that new interest had to come in which changed the mix and finally when we saw the EU benchmark price at 165 cents, we thought we had arrived. We were thrilled,” recalled Shenoy.

There has been a significant shift in the cost structure of ferro chrome in India in the last 6 months. In June-August, 2016, ferro chrome production costs in India were around ` 58,000 per ton. In this, the cost of chrome ore accounted for `24,000 per ton, which was 42 percent of the cost of production. Coke was at `6,805 per ton (12 percent of the cost of production).

Across the period of Q2 in 2016, December 2016 and February 2017, one may note that the cost of power has remained the same at `19,000 while the cost of coke has gone up from ` 6,800 to more than `12,000, though in February this year, the fuel was beginning to take a downward turn at `11,000 per ton. Chrome ore costs went up from `24,240 per ton in Q2 last year, to

Change in price regime between H1 and H2, 2016

Cover Story `61,440 per ton in December 2016 and then took a downward turn to `49,500 per ton in February 2017. In December last year, thus chrome ore buyers were in a spot of bother.

Ferro chrome prices themselves underwent a shift from `58,000 per ton in Q2 to ` 101,000 per ton in December 2016 to `87,200 per ton in February 2017 and almost ` 90,000 per ton ex-plant basis.

Thus, the industry saw dramatic changes in six months, led by the change in chrome ore prices within this period.

“The EU benchmark had been playing the catch up game with the China spot prices in 2016. And now it is at 165 cents. We will see how it features in the next quarter,” said an industry source.

Ferro chrome

The total ferro chrome production in India is around 1.4 mt per annum. Out of this, 1.05 mt is produced by the captive miners. This shows, 65 percent of producers are thus unaffected by the rise or drop in ferro chrome prices!

The large share of exports in the Indian ferro chrome pie can be attributed to the fact that the expected global stainless steel production would be rising at the rate of 3 percent and the major share would be exported out essentially because the rate of growth in ferro chrome production would be higher than the 3 percent envisaged for stainless steel.

India is poised to play an important role in the global ferro chrome industry because it has enough reserves of chrome ore of superior quality and suitable geographical location to meet the global rising demand for ferro chrome.

Shift in the cost structure of ferro chrome in India in the last 6 months

The majority of the ferro chrome production by captive mines is likely to continue to rise as there will be further consolidation in the industry. India is likely to see the integrated producers taking over the independent plants for the former would be better equipped to utilise the installed ferro chrome capacities.

There is the possibility of a great deal of conversions from manganese alloys to chrome alloys because of the volatility witnessed for the last 5 years in the manganese markets.

Ferro chrome is likely to attract new players as well in the future because of the rise in demand for stainless steel and the ease of availability of chrome ore in the upcoming years.

India’s ferro chrome production was at around 70,000 tons a month in January and there is likely to be an addition of 25,00030,000 tons in Q3 of this year with the entry of many new players into this space, which could ramp up capacity to almost 101,000 tons.

Tata Steel ferro alloy production to touch 0.5 mt Tata Steel, which began started operations at the ferro alloy plant at its Gopalpur plant with the first tapping done as recently as on February 25, 2017, is looking to increase its production to 0.5 million tons (mt) per annum in a couple of months from the current 3.6 lakh tons, T V Srinivas Shenoy, Chief, marketing & Sales, Tata Steel, informed Steel Insights on the sidelines of a seminar organised by the Indian Ferro Alloy Producers’ Association (IFAPA).

Production, post the start of the new plant, will immediately touch 4.2 lakh tons and with some further additions in capacity the volume will touch 0.5 mt, the official said.

Consequently, post -expansion, Tata Steel will become the fourth largest ferro alloy producer in the world, Srinivas Shenoy said.

Tata Steel is not looking at any new mines at present because, the official said, the company has enough capacity at present.

18 Steel Insights, March 2017

India follows the international price trend and chrome ore prices actually determine the cost of ferro chrome. Chrome ore prices, from `10,000 levels, went up to `24,000 levels and then down to `20,000 levels and it will be interesting to see what happens in the next quarter, what with coke in downward trend. The latter is currently at around $265 per ton but the consignment at this price is yet to arrive in India.

Ferro chrome production is concentrated in the eastern part of India. Odisha alone contributes 80 percent of India’s ferro chrome production, obviously, because of the presence of chrome ore mines in this state.

West Bengal’s share is 8.5 percent, Andhra Pradesh is at 6.5 percent, and Chhattisgarh and Gujarat are at 2.5 percent each.

In the first quarter, as per industry estimates, chrome ore production by OMC was at 1.2 mt, Tata, 1.05 mt, IMFA 0.6 mt, Balasore Alloys 0.27 mt, IDKOL 1.05 mt.

Where the future is concerned, the projected full capacity of the mines can be reached. Tata is producing 100 percent of its mines, while Balasore can go up to 1.6 mt and OMC can go up to 1.8 mt.

Global ferro chrome production is likely to increase from 11. 4 mt to 12.1 mt in 2017 and 12.4 mt in 2018. Globally, China is the leading producer with 14.2 mt, Kazakhstan is at 1.35 mt, and South Africa, 3.5 mt.

The top three producers of ferro chrome in the world are Xtrata with 2.1 mt, Samancor with 1.5 mt and ENRC, 1.1 mt. India’s share is around 10 percent of the total ferro chrome production pie.

Indian companies’ entry into the top five list is likely to happen very soon with Tata Steel’s Gopalpur plant getting commissioned in end-February.

Cover Story

Rational duty structure needed to bring shine back to stainless steel

Steel Insights Bureau

T

he sun is not exactly shining that brightly on the Indian stainless steel industry. The main shadow is being cast by the lack of a rational duty structure and high Indian power tariffs, feel most manufacturers. They also feel that the duty anomaly persists perhaps because the industry has not been able to effectively convey its problems to the government and that is why stainless steel scrap and ferro nickel have not been given any import duty relief in the last Union Budget. They say this is imperative if the domestic industry has to survive.

The Union Budget for 2017-18 reduced the basic custom duty on nickel, a raw material for stainless steel manufacturing, to nil from the earlier 2.5 percent. As a result, stainless steel is likely to become cheaper by up to 2 percent or `2,000 - 2,500 per ton effective April 1 following this move.

20 Steel Insights, March 2017

However, the basic customs duty on melting scrap remained unaffected by the Budget at 2.5 percent and on re-rollable scrap at 10 percent. Indian ferrous scrap imports were at 6.12 million tons (mt) in FY16, which are expected to come down to 5 mt this fiscal.

If India’s stainless steel industry is compared to China’s then one may notice that MS scrap needed for the production of the 200 series stainless steel is not available within the country. It has to be imported from Europe, the US and in smaller quantities from South Africa or the Middle East and bears the import duty burden of 2.5 percent.

On the other hand, in China the import duty on the same is nil. The scenario is ditto for ferro nickel, which also has not been able to shrug off the 2.5 percent import duty.

“What is really required to boost the industry is support to ferro nickel and stainless scrap because these two items are not available

within the country. There are no ferro nickel manufacturing plants within India. Where stainless steel scrap is concerned, barely 8,000 – 10,000 tons are available domestically. Here too, the scrap is not processed as is done worldwide. The stainless steel scrap in India is basically imported and undergoes some processing and then sold in the domestic market. For stainless steel operations to be viable we need to use a large quantity of scrap and ferro nickel and a small cushion of ferro nickel,” R Ganesh, Director – Sourcing, Jindal Stainless Ltd, said while speaking a seminar organised by the Indian Ferro Alloy Producers Association.

“The government has to take cognisance of these issues and take necessary measures.

We need to be competitive but there has be some rationality in the duty structure,” Ganesh observed.

In India, the basic customs duty on stainless steel finished flat products is 7.5 percent.

Strangely, industry experts say, countries like Brazil, Thailand and Vietnam have a higher duty on the final product compared to India’s and a low or nil duty on imports. As a result, their economy is fully protected. In India, for stainless steel making for the 300 series, for instance, the most important raw material is nickel, ferro nickel and stainless steel scrap. Pure nickel is used in very small quantities, may be 5-6 percent. What is predominantly used is ferro nickel and, to a large extent, scrap. This year, even if the Budget has taken some initiative to reduce the duty on pure nickel from 2.5 percent to nil, that will impact merely 5-6 percent of the raw material usage, said an official from a stainless steel manufacturing company.

Earlier, seeking a 5 percent duty hike on stainless steel finished flat products and elimination of the import duty on ferro nickel, industry body Indian Stainless Steel Development Association (ISSDA) had said the move would help the government earn `100 crore a year in terms of revenues.

“We have done some back-of-theenvelope calculations. If both these aspects – increasing the basic customs duty on stainless steel finished flat products from 7.5 percent to 12.5 percent and elimination of the duty on ferro nickel and stainless steel scrap) are taken together, the government would be a net revenue gainer,” ISSDA President K K Pahuja had said.

Cover Story The industry body had been pursuing with the government for zero duty on ferro nickel and stainless steel scrap and duty increase on stainless steel finished flat products.

“Such a move will help in two ways. One, the government will be a revenue gainer.

Two, once its gives a boost to the local industry it revives the economy which brings about a multiplier effect which further raises revenue prospects for the government,” Pahuja said.

The stainless steel industry, he said, is facing threat due to the unchecked imports coming into the country and added that the stainless steel industry should be treated at par with carbon steel.

“The stainless steel industry in already under pressure or in great distress… We are not asking for something special. We want parity with carbon steel,” he added. More than 20 percent of the demand of the stainless steel industry is met through imports, while in the case of carbon steel or bulk steel it is less than 10 percent, he added.

“The reason why the import intensity (for the stainless steel industry) is high is because we have lower protection from the lower basic custom duty of 7.5 percent,” he added.

Imports of stainless steel flat products in the last fiscal was 5.25 lakh tons against the domestic demand of 2.6 million tons, he said, adding that in the ongoing fiscal which is coming to an end this month, it would at a similar level.

“Fifty percent of capacity is idle today.

If we bring 10-15 percent more capacity utilisation it would be a big boost for the economy,” he stressed.

The added bother is the high cost of power in India. The power cost in China is 13 percent lower compared to India’s, adding to the cost of production.

consumption will see a jump from around 11 kg at present to almost 14 kg by 2020.

In India, the total capacity is 5 million tons at present but the capacity utilisation is 58 percent, underscoring the fact there is a large quantum of idle capacity sitting around.

The country’s current production volume, including flat and long products in the 200, 300 and 400 series put together, it is 2.9 mt - 3.1 mt of which 2.75 mt is consumed domestically while 0.65 mt tons of this is exported.

Today, India is the second-largest stainless steel producer in the world, at almost 3 mt, almost doubling volumes from 1.8 mt in 2006.

In fact, the import volumes are a spot of bother for the industry. “Our only competitor is imports, which is half a million tons and that too against the backdrop of struggle against prices,” said an official from a leading manufacturer.

Stainless steel and GDP growth goes hand in hand. Globally, China has been on top but is dropping while India is moving closer to the dragon country – which is good news for India but again it has to grow at a higher pace because it is operating at a low base. The growth has to be far sharper than what is happening currently. In 2016, the GDP growth was 7.1 percent and is expected to go up to 7.6 percent in 2017.

Stainless steel broadly has three series

– 200, 300 and 400. The 300 series has 8 percent nickel and 8 percent chrome while 400 is primarily the chrome series.

However, the real quantum of ferro alloys required by industry is mainly in the 200 series where the range is medium carbon silico manganese, ferro manganese and ferro chrome.

The 300 series is also an important thrust because most major manufacturers need ferro silicon.

As per Ganesh, the overall share of the 300 series has come down from 70 percent to 54 percent in India in the last 15 years, while the 400 series has remained steady at 23 mt. The 200 series has gone up from 6 percent to 21 percent. Which means, if the 200 series is going up then the overall quantum of ferro alloys usage is going up too – be it ferro chrome, ferro manganese or silico manganese. That’s good news for the industry!

In India, stainless steel is used largely as a consumer metal product. In our country, the metal products usage is at 52 percent against the global percentage of 39 percent. Around 52 percent (world percentage is 39) of stainless steel consumption happens in the catering, utensils, appliances and food industry, 27 percent (33 percent) finds application in the process industry and engineering industry, 9 percent (14 percent) in automotive and heavy transport, 13 percent (7 percent) in building and construction.

Estimated production and consumption in 2020

India’s SS industry

A modest growth of 5-6 percent is expected in the Indian stainless steel industry because there has been a slow and steady increase in production. And by 2020, the production volume would likely exceed 3 mt while consumption, which is at a little above 2 kg per person is slated to move up to around 3.5 kg per person while China’s per capita

Steel Insights, March 2017

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Cover Story Stainless steel production and consumption

As per industry experts, there is greater scope for usage of stainless steel in auto-roadtransport (ART), architecture-buildingconstruction (ABC) and the process industry and these are the areas where the future growth has to come from.

It may be noted that stainless steel has been a metal of choice in Indian Railways, Metro Rail, wagons and bus-stands etc. The metal is also being used in architecture and construction for its durability properties as well as in the oil and gas, food processing industries.

As per industry sources, India is the second largest market in the world for bus coaches and ISSDA and its member companies have been promoting the use of stainless steel as a material in the bus body for more than a decade though it has met with partial success in stainless steel usage with regard to panels and floorings.

The advancement in new technology of bus building and fabrication has also encouraged private bus body builders to move ahead with stainless steel-made buses and offer the best possible solution to their customers.

Stainless steel marketing efforts should focus on the material’s safety, light weight and sustainable development aspects, say sources. In terms of environmental safety,

22 Steel Insights, March 2017

stainless steel is fully recyclable, offering a Green solution.

Jindal Stainless (JSL) was the largest stainless steel flats manufacturer in the country with a 47 percent share in the total flat stainless steel production while Viraj, the largest long products maker, enjoyed a share of almost 38 percent in financial year 2013-14. JSL It has facilities at Hissar and Odisha and also a subsidiary in Indonesia.

It is perhaps the largest consumer of all categories of ferro alloys, be it ferro chrome or ferro silico manganese, ferro silicon etc. Its currently steel-making capacity is 1.8 mt.

Global outlook

The growth in global production of stainless steel, in the last 15-odd years, has been

almost 8 percent and, in the last two years, the global production volume has been at 42 million tons (mt). The first 9 months have seen a production level of close to 33 mt and the industry expects that, by fiscal end, the level should be 43-44 mt.

China is leading the pack, with close to 22 mt last year and in the first 9 months, this country has already clocked 18 mt.

Expectedly, China should be closing the year with a figure of 23-24 mt.

The global scenario in 2016 compared to 2005 interestingly reveals how China has clearly overtaken the rest of the world in terms of production. In 2005, it enjoyed 13 percent of the overall global market.

Today, it has taken control of a whopping 52 percent!

The share of the European Union (EU) and Africa has come down from 36 percent to 18 percent and Asia, excluding China, has reduced from 39 percent to 23 percent.

So, basically, EU, Africa and the rest of Asia, excluding China, have given up their share to the dragon country.

China has quadrupled production from 5 mt in 2006 to 23 mt in 2016 and the rest of the world has been stagnating or going down.

Thus, the bright spots are actually China, followed by India. There is a mighty distance to catch up for India but industry players are confident that it is on the right growth path.

In 2001, the total stainless steel production was 19 mt. China’s contribution to that was almost 0.9 mt and India’s 0.8 mt and this not too long ago. Today, the global production is at almost 44 mt and China’s production volume alone is at a whopping 23 mt! The entire growth thus has come about only on account of China in the last 16 years,

Stainless steel vs. FeCr production (Indexed)

Cover Story putting in perspective the country’s enormity of scale, allowing it to dictate the global stainless steel industry.

In terms of melt shop production (ingot/slab equivalent) in 1,000 tons, China’s production has jumped from around 12 mt in 2010 to almost 22 mt in 2016 and by 2020 it is likely to go up to almost 28 mt.

On the other hand, excluding China, the growth in global production has been steady but nothing remarkable. For instance, from around over 19 mt in 2010 it has gone up to 21 mt at present and is expected to touch 24 mt by 2020.Which shows that by 2020, China will have greater production volume than the rest of the world.

As per the International Stainless Steel Forum’s (ISSF’s) figures for the first nine months of 2016, stainless steel melt shop production increased by 7 percent year-on-year to 33.6 mt tons. Production increased in all regions except Central and Eastern Europe, the global body said.

Ferro chrome impact

There is a symbiotic relationship between stainless steel and ferro chrome or chrome alloys and in the past decade, the former grew at 4.5 percent and chrome alloys at 5.4 percent CAGR. Chrome alloy producers’ fortunes are wedded to stainless steel players’.

Interestingly, the way the growth in stainless steel has happened is on the back of China’s growing chrome alloy industry as well.

China’s share has grown from a mere 5 percent in 2001 to 36 percent currently. Despite significant disadvantages China has kept adding to its production capacities of chrome alloys. India’s share, on the other hand, has grown from 6 percent in 2001 to around 10 percent levels of the global share at present.

The stainless steel industry is a major consumer of ferro chrome.

Thus, the latter’s fortunes impact the stainless steel sector sharply. The chrome industry experienced a very difficult phase as a result of the challenging economic conditions globally and particularly in China, which had a significant impact on the total chrome market.

However, when no one expected, prices of the material started rising since the second quarter (Q2) of 2016. A series of events triggered this unprecedented rise in ferro chrome prices in India.

There has been a significant shift in the cost structure of ferro chrome in India in Q3 of FY17. Now chrome ore makes up 61 percent (42 percent) of the cost followed by power 19 percent (32 percent), coke 12 percent (12 percent), others 8 percent (13 percent), according to industry insiders.

Due to rescue of some ferro chrome companies in South Africa, and low chrome ore stocks at ports, China imported more chrome ore.

Taking advantage of the increase in stainless steel production, ferro chrome tender prices received good bids. This resulted in resumption of ferro chrome production locally.

The chrome industry took the change positively and is expecting a significant restart of Europe and US stainless steel markets. Other countries like Africa (Nigeria), Brazil, Mexico, Turkey and Vietnam are also expected to drive global stainless steel demand.

India, having the same population as China, with a new government pushing for economic and industrial development, has a strong potential for the future.

Steel Insights, March 2017

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feature Steel Insights Bureau

T

he automotive and construction sectors have been key drivers of development of the steel industry, according to T V Narendran, Tata Steel Managing Director, India & South East Asia.

Demand accounts for around 60 percent globally and around 70 percent in India.

There is sizeable interest in these sectors due to a projected rise in demand from around the current 58 million tons (out of the total demand of around 83 million tons in 2016) to 70 million tons by 2020.

Automotive industry

The Indian automotive industry has taken great strides over the past two decades and has emerged as one of the fastest growing markets in the world.

Globally, India is the second largest market for two-wheelers, sixth largest for passenger cars, eight largest for commercial vehicles and the largest in tractors.

The country has also emerged as a destination of choice for global automotive transplants and auto component manufacturers in the last decade.

The Automotive Mission Plan (20162026) envisages the Indian automotive industry to be among the top three in the world by setting challenging targets: ♦♦ Annual production target of `16.2 – 18.9 lakh crores; ♦♦ Stand first in the world in terms of production and sales of small cars, twowheelers, three-wheelers, tractors and buses; ♦♦ Be third in passenger vehicles and heavy trucks ; and, as a result, ♦♦ Add 12 percent contribution to GDP by 2026.

For this to happen, the industry must grow 3.5 - 4 times its current size (`4.64 lakh crore in 2015) in the next 10 years.

Key trends and challenges

The automotive industry is expected to be significantly impacted by new regulations in safety and emissions: ♦♦ Mandatory adoption of BS-IV emission norms from April 1, 2017 impacting commercial vehicles and two-wheeler industries.

24 Steel Insights, March 2017

Steel plans to ride Automotive Mission Plan

FEATURE ♦♦ L eapfrog from BS-V to BS-VI norms by 2020 (translated to improving powertrain efficiency and vehicle weight reduction for auto companies). ♦♦ Introduction of the proposed phase 2 of Bharat New Vehicle Safety Assessment Programme (BNVSAP). ♦♦ Mandatory assessment for safety ratings by independent agencies from 2020 for OEMs. Auto OEMs, recognising changing customer preferences, are also looking forward to providing extended “rustguarantee” on their models.

Increasing trend of electric vehicles, hybrid vehicles and fully connected vehicles will demand lighter yet safer and fuel-efficient vehicles despite increase in weight due to battery and other advanced control systems.

As a result of the above changes, the automotive material mix is expected to significantly change towards increased adoption of higher strength and corrosion resistant materials, Narendran said.

Steel for automotive

Steel continues to be a material of choice for automakers. It contributes to 60-65 percent of the total raw material content in the average Indian car.

Currently, the overall automotive steel consumption in India is 9-10 percent of the total demand (around 83 million tons per annum – including flat carbon steel, alloy steel and longs).

The flat carbon steel demand (currently at 4 mtpa) is likely to grow at 8-10 percent CAGR to meet the aspirations set forth in AMP, 2026, Narendran said.

Tata Steel has been a long-term partner to the auto industry and has maintained a market leadership position (around 43 percent) followed by JSW and Essar.

“Over the years, our investments in capacity and capability development have helped OEMs increase localisation content in their models and replace imported steel,” he said. With proposed changes in safety and emission requirements: ♦♦ The AHSS (>590Mpa) proportion is likely to increase from 10-15 percent to 30-40 percent. ♦♦ The coated steel content is similarly expected to increase to 25-30 percent of the weight (body-in-white + hanging

parts) from current levels of 10-15 percent.

The steel industry also needs to be prepared for advancements in new processing and manufacturing technologies to meet OEM requirements: ♦♦ Facilities for processing AHSS tailoredwelded blanks (TWB) ♦♦ Tailor-rolled blanks (roll formed) ♦♦ Hot stamping ♦♦ Multi-material welding/joining techniques etc.

Collaborative engagements between steel majors and downstream processors could be one of the ways to address these evolving needs.

Recognizing the evolving needs of the auto industry, Tata Steel has taken steps like ♦♦ Investing in state-of-the art CAPL line (joint venture with Nippon Steel) to provide full finish exposed panels as well as AHSS steel for the discerning PV OEMs. ♦♦ Its new plant in Kalinganagar will address the AHSS (up to 1200 MPa) and wider requirements in HR grades from wheels, CVs and passenger vehicles segments. ♦♦ Investments in setting up R&D and product application research labs are helping it provide cost-down-weightreduction (CDWR) solutions and advanced technical support to auto customers and solve issues they face in their press/weld/paint shops.

“With these investments and initiatives, Tata Steel is committed to be a supplier of choice to auto OEMs,” he said.

Outlook on construction industry

The construction sector, constituting of infrastructure, industrial, housing and commercial segments is a key driver of the Indian economy, contributing close to 8 percent of the GDP. The sector consumes about 60 percent of total steel in the form of structural steel, rebars, sheet products, pipes, sections, plates and rail tracks.

A large share of the paint and glass industry (60-80 percent) and significant portion of output from automotive, mining and excavation equipment industries are used in the construction industry.

It accounts for the second highest inflow of FDI after the services sector. The sector generates the highest level of direct and indirect jobs employing about 40 million people.

In recent years, the construction sector has been affected as a large number of projects got stalled during the period of stagnation between 2011 and 2014. Several factors contributed to this stress: ♦♦ Stalled assets in the infrastructure sector, ♦♦ High levels of receivables especially from the government entities, and ♦♦ Slowdown in the real estate sector leading to stretched liquidity and limited resources A slump in the industry was observed in the past few years owing to liquidity crunch among infrastructure developers.

Demonetisation, coupled with the announcement of the Real Estate Bill, also hit real estate sales across the country.

There has been a significant number of initiatives by the government to revive the industry in the traditional roads and highways sector: ♦♦ Road sector has seen a huge improvement in terms of execution with >20km/day of national highways being laid this year along with >100km/day of rural roads. ♦♦ Policy changes implemented by the Ministry of Road Transport & Highways and National Highways Authority of India (NHAI). ♦♦ Budget allocation for highways has been increased to `64,900 crore for FY18 and 2,000 km of coastal connectivity roads have been identified for construction and development.

In addition, a large number of relatively younger initiatives will drive sizable demand: ♦♦ The Smart City Mission will promote sustainable and inclusive cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions. ♦♦ Rural electrification is being pursued aggressively by the government with the launch of the Deen Dayal Upadhyaya Gram Jyoti Yojana. ♦♦ Railways is focusing more on new

Steel Insights, March 2017

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FEATURE lines, gauge conversion, doubling and electrification – two new dedicated freight corridors are being developed aggressively.

Steel for construction

Steel companies, including Tata Steel, have recognised and internalised these changing trends and have embarked on the objective to provide solutions to the construction industry by providing: ♦♦ Off-site factory made offerings - like pre-fabricated structural, cut-andbend solutions and weld mesh in reinforcement areas. These solutions are designed to speed up construction work, reduce dependence on unskilled labours and address the need for safe, healthy and environment-friendly working atmosphere

26 Steel Insights, March 2017

♦♦ A esthetic steel doors with a wide variety of colours, textures and patterns, including wood finish, are being made available to individual house builders which has started replacing wooden doors. ♦♦ Steel-based smart solutions like intelligent public toilets, smart trash bins, smart bus shelter systems are being developed which will promote new shapes, grades and design for steel apart from enhancing steel intensity.

Narendran also mentioned that a paucity of ideas for research, and not funds, is responsible for low spends by the industry on R&D projects.

“It is true that R&D spends are low (0.3 percent for Tata Steel), but the issue is not about money or the cost of the project,”

Narendran said while speaking at the opening session of Metals 2017, a symposium organised by the Bengal Chamber of Commerce and Industry. “The issue is about project ideas,” he added.

The recent Make in India initiatives by the Centre and the emergence of India as a hub for small-car companies should generate increased demand for steel, he said.

“Tata Steel, a long-term partner of the automobile industry, looks forward to this, along with other major steel producers like JSW and Essar,” Narendran said. However, the increased safety norms and the emission norms place fresh demands on the type of steel to be used.

In this context, he rued that processingfacilities were not keeping up with demand.

“They are a volume player and they need to move to become a value player,” he said.

feature

RINL soft-pedals on 11mt expansion plans Entry into flat products segment part of future strategy

Madhumita Mookerji

L

ong products major Rashtriya Ispat Nigam Limited, which had drafted a short-term roadmap for 11 million tons (mt) of production by 2018-19, has slowed down a bit on its expansion plans, reliable sources have informed Steel Insights.

The public sector steel major had also drafted a roadmap for 20 mt by 2030 in keeping with the government’s grandiose plans of 300 mt by 2030.

Within this 11-mt expansion strategy, the PSU is also mulling plans to enter the flat products space for which the company will need separate facility. “The detailed project report (DPR) is ready for the 11-mt expansion. All the details with regard to its 7.3 mt expansion is over and the company was

working on the 11-mt roadmap. However, seeing the current depressed market scenario, RINL is dragging its feet a little with regard to its expansion plans,” a source informed, adding, “The pace at which RINL was moving ahead with its expansion plans have decelerated.”

As part of its plans to enter the flat products segment, the company has a slab caster in mind within the Vizag Steel plant complex, it is learnt.

Where its capacity is concerned, RINL’s Vizag Steel Plant (VSP) initially had a 3 mt capacity. It revamped this and added a capacity of 3.3 mt and by revamping it further, has taken this up to 7.3 mt by the end of the current fiscal, the source informed.

This current capacity expansion involved revamping of old equipment and new capacity addition of 3.3 mt.

The PSU is likely to close the current fiscal of 2016-17 with a production volume of 4.3 mt, the source said, adding that after all RINL’s capacities have gone onstream, the production capacity has been raised to 6.3 mt but it will be producing 4.3 mt this fiscal-end.

The source hinted that there were problems initially in the form of delays in the units coming up. Now, however, all the capacities are in place and by end of 2017-18, it should be touching at least 6.3 mt if not 7.3 mt.

RINL is mainly into long products.

Within this, wire rods form the largest revenue generator for the company, contributing around 30 percent to its revenues.

It also has a presence in rounds and structurals, with the former, contributing around 20 percent to the kitty.

Steel Insights, March 2017

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FEATURE MIP relief

However, as with all the other players, VSP too is facing tough times. The minimum import price (MIP) gave a marginal relief to the steel industry and also buoyed the fortunes of RINL. Long product prices had recouped to `32,000 per ton from a low of `24,000-`27,000 in August of last calendar, offering a big relief for RINL. Consequently, for the two months of November-December, RINL has shown a positive profit at the gross margin level. It had a cushion of cash profit of `9 crore only for these two months. However, as a whole, the company has been incurring a loss of `120 crore per month, it is learnt.

Consequently, RINL is likely to close the fiscal with a loss of `1,000 -1,200 crore or similar to what it incurred last fiscal, the source informed. It may be recalled that the

RINL to double solar capacity Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant aims to double its solar power capacity at an additional investment of `35 crore, as part of its Green initiative.

After synchronizing its 5-MW solar power plant with the state grid a few months ago, RINL is now able to meet the power requirements for its township and administrative building.

The solar plant had been commissioned by Union Steel Secretary Aruna Sharma on December 16, last calendar.

Meanwhile, the PSU has signed a memorandum of understanding (MoU) with Andhra Pradesh Mineral Development Ltd for “exploration and exploitation of Kukunoor iron ore mines” located in the West Godavari district.

The MoU was signed by D N Rao, Director (Operations), RINL and Venkaiah Chowdary, ViceChairman, APMDC, on behalf of VSP and APMDC respectively during the Partnership Summit held at Visakhapatnam recently.

28 Steel Insights, March 2017

company had closed 2015-16 with a net loss of `1,421 crore after reaping 13 years of profits.

NMDC merger talks?

Talks of an RINL-NMDC merger has been gaining currency and the source feels that if the merger does happen it will be a win-win situation for both companies.

For raw materials, RINL is dependent on NMDC. However, though NMDC is setting up a plant at Nagarnar, it does not have any experience in steel-making being predominantly a mining major. It is keen to use RINL’s technology and use the latter’s experience in steel-making to run the plant.

There has also been a proposal for the divestment of a stake in the Nagarnar steel plant being set up by NMDC. Bhilwara iron ore mine

Meanwhile, production at the iron ore mine allocated to RINL at Bhilwara in Rajasthan may start in a couple of years. “A team has been formed to study the details and an office has been set up there and production is likely to start in 2 years,” the source said. The team needs to study the nitty gritty because the beneficiation percentage is very low at this mine.

Indian iron ore generally has 40-42 percent Fe content. So RINL will be setting up a beneficiation plant near the mine and a 2-mt pellet plant for value-addition. An

initial investment of `2,500 crore had been planned for this mine.

In fact, one of RINL’s main challenges has been lack of captive iron ore mines, the source said.

Steel outlook

The steel industry could see an upturn of 5-6 percent if the government puts in place all its infrastructure plans and achieve its target of 300 mt by 2030, feels the RINL official.

He further feels that consumption has to be pushed up first. “There is a problem in general for the steel industry with respect to land and water. But the government’s thrust regarding consumption of steel in rural areas, development of the construction sector, railways etc – If all this happens then there should be a growth of 5-6 percent in steel demand,” the official said.

The main issue at VSP at present is how to cut down on the cost of production. What is required is at least 1-1.5 percent reduction in cost which will be beneficial for the company, the official stressed.

VSP is currently focusing on stabilisation of the expansion areas, ramp-up of production to 7.3 mt and, importantly, safety aspects.

The plant has been plagued by incidents of blasts and fires in the past. However, the official said the plant has incorporated all the safety factors which give it the confidence of being able to successfully continue its operations.

FEATURE under pressure in the coming few months to a certain extent. This is because it is likely that the demand for steel from the user industries like construction and real estate will take some time to strengthen. However, government push towards infrastructure will compensate for this reduction in demand.

Consumption revival may boost steel output in FY18: CARE

Steel prices

Global and domestic trend

Steel Insights Bureau

S

teel production in financial year 201718 is expected to remain higher, riding on an expected revival in consumption, coupled with an increase in infrastructure allocation by the government in the Union Budget for 2017-18, as per a report released

by CARE Ratings.

According to the report, “State of Steel Industry and Prospects”, construction and infrastructure in the country are expected to drive the pace of steel consumption. Apart from this, the National Steel Policy, 2017 released by the government, also aims to increase steel production. As a result, both production and consumption of steel are expected to remain buoyant in 2017-18.

Domestic crude steel production stood at 88.97 million tons (mt) and 89.79 mt respectively during 2014-15 and 2015-16.

In the current financial year of 2016-17, the global steel market seems flat. Production from the top five steel producing countries (excluding India) remained subdued even during April-December, 2016 on a y-o-y basis. While crude steel output in China, Japan and Russia grew by mere 0.5-3 percent, output in the US remained flat and that in South Korea declined by 1.3 percent.

In contrast, crude steel production in India rose by 8.8 percent to 72.35 mt during this period. This was on account of higher output by the major Indian steel companies.

The imposition of the minimum import price (MIP) encouraged the producers to increase their output, says report.

Consumption of steel, on the other hand, grew by just 3.2 percent to 73.75 mt during April-December, 2016. Post-demonetisation, steel consumption is expected to remain

Category-wise production of long and flat products (in ‘000 tons) Category Bars & rods Steel structural Railway materials

2011-12

2012-13

2013-14

2014-15

2015-16

28,102.00

28,795.00

29,550.00

32,251.00

32,999.00

4,939.00

5,932.00

6,896.00

7,495.00

7,508.00

909

938

887

835

886

Long products

33,950.00

35,665.00

37,333.00

40,581.00

41,393.00

GP/GC sheets

5,681.00

6,287.00

6,898.00

6,892.00

6,539.00

HR coils

16,450.00

19,391.00

20,806.00

20,205.00

18,594.00

CR sheets/ coils

7,038.00

7,654.00

7,722.00

7,509.00

6,964.00

Pipes

1,954.00

2,007.00

1,978.00

2,094.00

2,065.00

Electrical sheets

149

155

126

140

123

Tin plates

253

301

344

354

309

HR sheets

537

555

920

1,138.00

1,512.00

4,665.00

4,161.00

3,896.00

4,700.00

4,324.00

36,727.00

40,511.00

42,690.00

43,032.00

40,430.00

4,998.00

5,484.00

7,637.00

8,544.00

8,569.00

Plates Flat products Alloy steel Source: CMIE

Steel prices are expected to rise marginally or remain stable in the coming months along with production. This will be backed by a likely increase in domestic steel consumption and protectionist measures by the government.

However, the movement in domestic prices will largely be influenced by the international steel prices. The global steel prices, in turn, are majorly dependent on the demand supply situation in China and production capacity cuts that the country undertakes to address the problem of overcapacity. China leads the problem of excess steel production capacity in the world.

The prices of steel products in China are believed to have increased on account of improved demand for steel from the country for infrastructure and construction.

Also, production capacity cuts undertaken

by China are believed to have supported the price rise.

Raw material prices

The price rise of raw materials are a cause of concern for the sector. The major raw materials used for the manufacturing of steel are coking coal and iron ore. While the demand for iron ore is majorly met domestically, coking coal is largely imported for manufacturing of steel. Around 70 percent of coking coal requirements is fulfilled through imports. The international coal prices, which remained subdued during the year 2015 and in the initial months of 2016, picked up from May 2016 on a month-on-month (m-o-m) basis. The prices increased sharply in July 2016 and further in October 2016.

It can be concluded that steel production and consumption is expected to remain higher in 2017-18 riding on an increase in infrastructure allocation by the government in Union Budget 2017-18. The price movement will also remain stable but the uncertainty in raw material prices is a cause of concern.

Steel Insights, March 2017

29

FEATURE

IOCL to set up plants for lubricant additives, base oils

Madhumita Mookerji

I

ndian Oil Corporation (IOCL), which has a 27 percent share in the Indian lubricants market, is planning to set up two new units, one in additives and the other in manufacturing base oils, a company official informed Steel Insights on the sidelines of a seminar on “Emerging Technologies and Applications for Steelmaking, Continuous Casting, Rolling and Finishing Mills, organised by Steel & Metallurgy.

IOCL currently has a 50:50 tie-up

with Lubrizol in additives, apart from a joint venture with Chevron, called Indian Additives Limited.

These two partnerships are helping IOCL get cost-effective lubricants. But, the official said, it is now important for IOCL to have its own additives manufacturing set-up in order to face competition.

Both the manufacturing plants are at the drawing board stage and thus the official refrained from divulging further details in terms of investments etc.

While the additives plant is likely to come up at either the Panipat or Paradip refineries, the base oils plant is slated to come up at

IOC has developed indigenous rolling oils to bring in cost competitiveness for steel plants and is now working on greases for high temperature applications since heat levels are very pertinent in the steel manufacturing process.

30 Steel Insights, March 2017

Panipat and be up and running in another 2-3 years’ time, the official said.

At present, group 2 base oils are being sourced from the Haldia refinery of IOCL. Plans are afoot to manufacture group 2 and 3 base oils at the Panipat Refinery complex.

Indian Oil has various types of lubricants to cater to a gamut of machineries and equipment, having been in this business for 40 years. Its lubricants R&D centre at Faridabad is also in expansion mode.

“We have various kinds of lubricants and all are applicable in the steel industry,” the company official said. Around 60-70 percent of IOCL’s lubricants are supplied to the steel sector.

“Lubricants contribute only 1 percent of IOCL’s total sales. Once these facilities are up and running, we can push up our marketshare,” the official said.

In lubricants, IOCL’s market share is 27 percent. Once these two manufacturing units come up, then IOCL’s lubricants market share will go up to 30-32 percent, as per indications.

The total lubricants market in India is 3.4 million tons. In value terms, IOCL’s 27 percent share is worth `8,000 crore.

Products that have been recently launched include hydraulic oils. “We have already developed this and will shortly start marketing the same,” said the official, adding that it is being used by the heavy industries currently.

That apart, IOCL has also developed long drain interval oils which increase the life of a lubricant from 500 hours by a further 250 hours. “If the life of the fuel can be increased by say 25-30 percent, imagine how much a steel plants can save in terms of costs,” the official observed.

IOC has developed indigenous rolling oils to bring in cost competitiveness for steel plants and is now working on greases for high temperature applications since heat levels are very pertinent in the steel manufacturing process.

Fuel efficiency hydraulic oils are important because these are directly related to fuel consumption.

If a manufacturer increases the drain interval then this reduces energy consumption. Ultimately, all these lubricants can reduce the cost of operation for the steel industry by 0.5 to 2 percent, lubricants experts say.

FEATURE

Station redevelopment to be done on surplus land Steel Insights Bureau

I

n order to transform the face of Indian Railways, Railway Minister Suresh Prabhakar Prabhu launched the first phase of the world’s largest station redevelopment programme, comprising 23 major railway stations on the Indian Railways network.

Commercial potential of vacant Railway land at/near stations will be leveraged to develop world class stations with no additional funding required from the Railways. The programme is expected to generate a surplus in excess of `10,000 crore for Indian Railways which can be invested in other modernisation projects. Select high potential stations will be turned into iconic ones and will be developed as per highest global standards and design norms.

To maximise commercial potential of the public assets, Indian Railways plans to bid out the projects through a transparent and competitive method. Taking cue from global best practices, Indian Railways has adopted the so called “modified Swiss challenge” methodology for the bidding process.

With an overall size of `1 lakh crore, the programme is one of the largest PPP programmes undertaken in the country. It will provide approximately 2,200 acres of prime land to the private developers across top 100 cities of the country. A committee of eminent experts would be formulated to provide suggestions to zonal railways on proposals submitted by bidders in addition to the technical and financial committee recommendations.

Indian Railways has reached out to the private developers and investors through road shows in Delhi, Mumbai, Kolkata, and Abu Dhabi to gauge market interest and receive feedback on the bidding process. The Railway Board has also engaged with the zonal railways through multiple workshops to accurately assess land availability.

Speaking on the occasion, Minister of

Railways Suresh Prabhakar Prabhu said Railways have certain advantages, of which one is holding land on a large scale. He said that railway stations can be developed into an iconic property. He said that the properties of Railways have a unique characteristic and that the Ministry of Urban Development is collaborating with the Ministry of Railways to develop smart stations because these are a pre-requisite for a smart city. He further said that the project of re-developing 400 A1 and A category stations in the country is the biggest non-fare revenue generating programme which will be done on a publicprivate partnership (PPP) model through a fair bidding system conducted by the respective zonal railways.

Railway Board Chairman A K Mittal said, “The last 10 years’ efforts will see a culmination as we launch the first lot of stations for redevelopment through publicprivate partnership. These stations have been selected for this phase after detailed feasibility studies carried out by our strategic advisors, The Boston Consulting Group. He said that the Railways’ mission is to redevelop stations using the surplus revenue that will be generated from commercial development of spare railway land.

The 400 stations to be redeveloped will provide amenities and services to passengers in line with best in class railway stations.

In the first phase, 23 stations will be bid out and names include Chennai Central, Ranchi, Udaipur City, Indore, Yeshvantpur, Bangalore Cantt., Visakhapatnam, Howrah, Kamakhya, Faridabad, Jammu Tawi, Secunderabad, Vijayawada, Kozhikode and Bhopal. Railways will provide approximately 140 acres of encroachment-free land at these stations to the developers on a 45-year lease.

Indian Railways has also appointed nodal officers in each zone to ensure smooth interactions with the developers. The phase is expected to be of approximately `6,000 -9,000 crore in size.

BCG is the strategic advisor for this

programme and based on the commercial assessment conducted by it and several rounds of discussions held with the developers and zonal railways, the Indian Railways team is confident that the round will generate sufficient market interest.

The redeveloped stations will improve passenger experience by providing amenities like digital signage, escalators/elevators, selfticketing counters, executive lounges, luggage screening machines, walkways, holding areas for passengers, grand and distinctive roofing and flooring, free and paid Wi-Fi etc. The programme will benefit more than 100 cities and 16 million passengers per day across the country. The commercial development undertaken near the stations will become nerve centres of the city and provide quality retail, commercial and hospitality development.

The launch event for the programme, conducted at Rail Bhavan and several zonal railway offices was attended by more than 100 developers and other potential bidders who expressed a high level of interest in bidding for these stations.

After the first phase, 100+ stations are expected to be launched in Phase 2 and the remaining A1 and A stations will be launched in Phase 3 of this programme.

Minister reveals Railways revival blueprint

Steps for making Indian Railways a profitearning entity include measures for enhancing earnings on the one hand and controlling avoidable revenue expenditure on the other, Minister of State for Railways Rajen Gohain said in a written reply to a question in the Lok Sabha on February 8.

Revenue enhancing measures, inter alia, include targeting progressively higher traffic throughput, effective marketing strategies to capture more and more traffic, creation of additional capacity and optimum utilisation of the existing rail infrastructure, enhancement in productivity and efficiency, improvement of passenger interface, periodic rationalisation of fare and freight rates and focus on increasing the share of non-fare revenue sources in Railways’ earnings.

Expenditure control measures include strict economy and austerity, improved manpower planning, better assets utilisation, inventory management and optimising fuel consumption etc.

Steel Insights, March 2017

31

FEATURE

Dumping duty extended on some products from China Steel Insights Bureau

I

ndia has extended the anti-dumping duty on some steel products from China by five years, in a bid to retain protectionist barriers and stem the tide of cheap foreign products.

The long-term measure, on the import of seamless tubes, pipes and hollow profiles of iron, alloy or non-alloy steel, stands effective as of May 17 last year when the government had imposed a provisional anti-dumping duty, according to the circular.

Between April and January, India's steel imports fell 37.8 percent year-on-year, data from a government body showed, primarily due to the slew of protectionist steps announced by the government.

India conveys reason for MIP on steel to WTO: Minister

India has conveyed to the WTO the reason for imposition of the minimum import price (MIP) on steel products and is ready to discuss the issue further if required, Steel Minister Chaudhary Birender Singh has said.

Japan has dragged India to the World Trade Organisation against certain measures taken by New Delhi on imports of iron and steel products. “The rationale for imposition of the MIP had also been communicated to WTO through our Indian Ambassador. So, if there is any further clarification required, the ministry is ready to discuss the same,” Singh said.

India has moved from MIP to the regime of anti-dumping and safeguards, he said, adding that the MIP mechanism was an exigency measure that was taken to curb the unabated surge in imports at predatory pricing.

He said the MIP was notified as an emergency measure as other trade remedial measures such as anti-dumping rules and safeguard rules are process-oriented and time-consuming in terms of implementation and impact.

32 Steel Insights, March 2017

“However, the MIP was gradually phased out as and when suitable trade remedial measures were put in place,” he added.

The Government of India, he said, has provided extensive support to the domestic steel industry by way of various trade remedial measures in recent times, such as the MIP, anti-dumping and safeguard measures and quality control.

“The current scenario in the steel sector is well known and, hence, the government will take all necessary measures as and when required to support the industry,” Singh said.

As on date, 124 out of 173 tariff lines initially notified as MIP, are covered under anti-dumping duties in addition to the safeguard duties on hot rolled coils and plates.

The MIP has also been withdrawn on February 4, he added. “On December 20, Japan notified the WTO Secretariat that it had requested dispute consultations with India in the dispute ‘India—Certain Measures on Imports of Iron and Steel Products’,” the WTO had said.

India extends dumping duty on some steel products

India has extended by two months the antidumping duty on certain cold-rolled flat steel products from four nations, including China and South Korea, to guard domestic industry from cheap imports.

The anti-dumping duty to be paid is the difference between the landed value of the steel products and US$594 per ton.

The duty was earlier imposed on August 17, 2016, for six months on cold-rolled flat products of alloy or non-alloy steel from China, Japan, South Korea and Ukraine.

The Central Board of Excise and Customs (CBEC) amended the August 17 notification to extend the levy of duty by two months from the present six months.

The anti-dumping duty was imposed on recommendation of the Directorate General of Anti-Dumping (DGAD), an arm of the commerce ministry.

Centre mulls setting up scrap-based steel plants The government has said it is planning to set up scrap-based steel plants in the northern and western parts of India to augment the country's production capacity.

"We are examining the feasibility of setting up scrap-based steel plants,” Steel Minister Chaudhary Birender Singh said during a “Make in Steel” conference in New Delhi.

Stressing that the scrap-based steel plants are environment-friendly, energyefficient and cost effective, he said that these would be on the lines of ‘melt and manufacture’ steel technology used in the US. "I would like you to deliberate on the cost-benefit analysis of setting up scrapbased steel plants in northern and western India. These regions are important from the perspective of scrap availability and steel import hubs. The plants will have the capability to produce special highgrade steels, a pre-requisite for ‘Make in Steel’,” the minister said.

India, he said, imports around six million tons of scrap steel every year and is the second largest importer of scrap after Turkey, adding that, by 2025, the country will be able to generate 7.5 million tons of scrap every year.

Stating that India's share in global steel output has increased to 5.09 percent last year from 5.5 percent in 2015, Singh said: “So far as production of steel is concerned, we are on the right path.”

The DGAD has come to the provisional conclusion that "the subject goods have been exported to India from the subject countries below normal value (and) the domestic industry has suffered material injury on account of subject imports from the subject countries," the CBEC had said.

Also, the injury has been caused by the dumped imports of the subject goods from the subject countries, the August 17 notification quoted the findings as saying.

FEATURE

India Ratings maintains stable outlook for construction, cement

Steel Insights Bureau

I

ndia Ratings and Research (Ind-Ra) has maintained a stable outlook on the construction sector for FY18, driven by the expectation that the slow but steady increase in revenue and improvement in EBITDA margins seen during FY16 and 1HFY17 will continue in FY18.

The sector is likely to witness a gradual improvement in credit metrics, although constrained by the companies under debt restructuring showing no signs of recovery.

The sector has seen improvement in liquidity position, with a significant improvement in cash flow from operations (CFO) in FY16, although it continued to remain negative. Liquidity is likely to improve further, with CFO improving over FY17-FY18 to reach near-zero levels. A positive CFO is imperative for the sector to fund its working capital, as bank credit growth to the sector plunged over FY16FY17. However, maintaining improvement in cash flows over the medium term would depend on a prudent accumulation of orders.

Order inflow is likely to grow in

FY18, primarily driven by increased public investment in transport and urban infrastructures, power transmission, and water and irrigation projects. The overall allocation for roads, housing and electrification increased 18 percent year on year in the Union Budget 2017-18.

However, the allocation for the National Investment and Infrastructure Fund continues to be low. The fund was expected to leverage the initial funding multifold for investment and provide a stimulus to the infrastructure sector, which will not happen in FY18.

The sale of public private partnership projects in the roads sector has increased significantly during 2016, which is likely to continue in 2017. This may aid in deleveraging of balance sheets of construction companies. However, this will continue to remain a buyers’ market, given the significant demand and supply mismatch.

Improvement in Cash Flows: The sector outlook could be revised to positive, if there is a continued improvement in cash flow margins, and thus improved credit metrics.

Increase in Debt Intensity: The sector

outlook could be revised to negative, if the companies shift their focus back to public private partnership projects, leading to an increase in capital intensity without adequate equity infusions. Accumulation of large order books leading to a liquidity squeeze could also lead to the sector outlook being revised to negative.

Cement manufacturers maintain operating profitability in FY18

India Ratings and Research (Ind-Ra) has maintained a Stable Outlook on Indian cement manufacturers for FY18.

Ind-Ra expects the operating profitability of cement manufacturers in FY18 to be around the FY16 and estimated FY17 levels, due to stable demand growth, despite an increase in input cost. Demand will be backed by an increase in government expenditure. Ind-Ra also expects the credit profile of cement manufacturers to remain stable on stable operating profitability and in the absence of debt-led capex.

Ind-Ra has revised down its FY17 growth estimates to 3-3.5 percent from 4-6 percent earlier. This revision is largely attributed to

Steel Insights, March 2017

33

FEATURE a blip in demand due to demonetisation.

Ind-Ra however expects the cement industry to grow 4-5 percent year on year in FY18, driven largely by the demand stemming from infrastructure activities and a revival in housing demand in rural areas, both led by government spending.

The price of pet coke and coal has almost doubled since September 2016. The current increase in crude oil prices is also likely to lead to an increase in diesel prices. Ind-Ra expects stable cement demand to enable cement manufacturers to pass on increases in cost during FY18.

Ind-Ra believes that a 38 percent and 23 percent increase in the allocation of funds towards the housing sector under Pradhan Mantri Awas Yojna and spending of the ministry of road transport and highways to `290 billion and `649 billion, respectively, would increase cement demand in FY18.

Ind-Ra expects cement producers to add additional 50mtpa capacity over FY16-FY18 at a CAGR of 6 percent compared to the CAGR of 4.9 percent during FY13-FY16 (additional 40mtpa). The country’s eastern region will continue to lead supply growth and is likely to add 17mtpa through FY16FY18, followed by north (14mtpa). The CAGR capacity additions in the eastern (10 percent) and northern regions (7 percent) may outpace cement demand in these regions.

Pan-India capacity utilisation remained stable in FY16 at around 70 percent. However, Ind-Ra has revised pan-India capacity utilisation for FY17 to 65 percent from 6970 percent, due to the weak demand outlook in 2HFY17 on account of demonetisation.

Ind-Ra does not expect capacity utilisation to improve significantly in FY18. It is likely to remain around 70 percent during FY18.

The credit profile of cement manufacturers for FY17 is likely to remain stable. The negative impact of a possible decline in operating profitability during 2HFY17 due to an increase in fuel cost and lower volumes will be compensated by the higher operating profitability reported by the companies during 1HFY17 due to lower fuel prices and higher demand.

Ind-Ra expects the credit profile of cement manufacturers to remain stable during FY18 in the absence of major debtled capex plans and on an improvement in cement demand despite a possible increase in input costs.

34 Steel Insights, March 2017

Housing Demand Ind-Ra does not expect any significant turnaround in housing demand in the near term; however, a higher-than-expected housing demand or significant progress by the government on schemes such as Housing for All or Smart Cities could result in a better cement demand and thus in a positive sector outlook.

Construction/Infrastructure Sector A lower-than-expected pick-up in construction/infrastructure projects could affect the credit profile of cement players and result in the sector outlook being revised to negative.

Ind-Ra maintains negative outlook on real estate sector

India Ratings maintained a negative outlook on the real estate sector for FY18, based on the expectation of a continued slump in the sale of residential units.

This will result in continued negative cash flows and a further increase in alreadyhigh debt levels, resulting in the weakening of the sector’s credit profile.

The sale of residential units has been falling since FY14 due to the continued high prices of residential units making them unaffordable to end-users and the significant delays in the completion of under construction projects (sometimes by even more than three years), thus impacting consumer confidence in the sector. The sale of units to individuals who purchase residential units for investment purposes is also likely to be severely curtailed by the demonetisation exercise, the

implementation of the Prohibition of Benami Transactions Act and the proposal to restrict set-off of loss on rented properties against other income heads introduced in the union budget 2017-18.

The continued fall in sales is likely to curtail liquidity, which will be further impacted by the likely implementation of the Real Estate (Regulation and Development) Act, 2016 during 1HFY18. While the sector has largely relied on refinancing to meet its debt servicing obligations, Ind-Ra believes refinancing will increasingly become difficult with revival in sales unlikely.

Ind-Ra believes that the sector needs to undergo a structural change in the way it does business to revive itself and move towards a model of unit sales post completion of projects. Such a structure would favour large organised real estate companies having better access to institutional funding and lead to consolidation in the sector. However, a single window system for time-bound approvals is imperative for the success of any such structural changes in the system and for the sector’s long-term survival and growth.

Improvement in Demand A price correction and the consequent revival in consumer demand, resulting in a positive free cash flow and a reduction in debt levels could result in a stable outlook for the sector.

Asset Monetisation Sale of land and commercial property assets, leading to a substantial reduction in debt levels could be a positive driver for issuer ratings.

FEATURE

Jan cheer transported to Feb for auto cos

Diptoshree Sengupta

M

ost of the automobile companies registered positive sales growth in February 2017. Though the growth rate in February 2017, which was at 9.41 percent, was lower than January’s 16 percent growth, the positive sentiment of January 2017 was still there.

Domestic car sales stood at 245,938 units in February 2017, up 9.41 percent compared to 244,776 units in February 2016.

Domestic sales of Maruti Suzuki India Ltd (MSIL), the largest car manufacturer in India, increased 11.5 percent to 120,599 units in February 2017 from 108,115 units in the same period of the previous year. The utility vehicle segment was the top performer, registering a 110.5 percent growth on a y-o-y basis. In February 2017, the sales volume of Gypsy, Ertiga, S-Cross, Vitara and Brezza altogether stood at 17,863 units in February 2017 from 8,484 units in the same period of the previous year.

However, the mini segment, which includes the Alto and WagonR, where Maruti is the leading player, was unable to perform well. In this segment, the company sold 33,079 cars in February 2017, down 6.8 percent compared to 35,495 units in February 2016.

Sales of the second-largest carmaker, Hyundai Motor India Ltd (HMIL), registered a 3.96 percent growth to 42,327

units in February 2017, from 40,716 units in February 2016. Rakesh Srivastava, Senior Vice-President, Sales & Marketing, HMIL, said, “Increased customer visits and improved customer confidence helped the sales growth.

The Union Budget positively impacted the customer’s disposable income and overall business sentiments. With this, Hyundai also continues its positive growth momentum month-on- month, strengthening its brand trust within the customers.”

Domestic car major Mahindra and Mahindra (M&M) is the only carmaker which reported a negative growth. On a Domestic car sales – February 2017 vis-à-vis February 2016 Automobile

February 2017

February 2016

% change

Maruti Suzuki

120,599

108,115

11.55

Hyundai Motor India

42,327

40,716

3.96

Mahindra & Mahindra

20,605

23,718

-13.13

Honda Cars India

14,249

13,020

9.44

Tata Motors

12,272

10,728

14.39

Toyota Kirloskar Motor

11,543

10,312

11.94

Renault India

11,198

8,834

26.76

Ford India

8,338

5,483

52.07

Nissan Motor India

4,807

3,850

24.86

245,938

224,776

9.41

Total

year-on-year (y-o-y) basis, its sales decreased 13.13 percent to 20,605 units in February 2017. Pravin Shah, President and Chief Executive (Automotive), M&M, said, “The auto industry is seeing some positive trends emerging over the last two months. We also hope that the impending implementation of GST will provide a veritable boost to the auto industry and the economy in general.”

Honda Cars India, Tata Motors and Toyota Kirloskar Motor (TKM) reported 9.44 percent, 14.39 percent and 11.94 percent growth respectively on a y-o-y basis riding on the positive outlook. Yoichiro Ueno, President and CEO, Honda Cars India, said, “The market has shown positive sentiment during February and HCIL has also benefited from it. This month’s sales growth has been driven by an excellent response to the new Honda City 2017, which has received over 10,000 bookings so far.”

Tata Motors also received an encouraging response to its recently-launched lifestyle UV, Tata Hexa. On the other hand, N Raja, Director, Sales & Marketing, Toyota Kirloskar Motor, said, “Both the new Fortuner and Innova Crysta have been performing consistently, attributing to TKM’s domestic growth.”

Comparatively, small-ticket players Renault India, Ford India and Nissan Motor India have performed exceedingly well, depending on the low base effect. These carmakers have registered 26.76 percent, 52.07 percent and 24.86 percent growth in sales on a y-o-y basis.

Anurag Mehrotra, Executive Director, Marketing, Ford India, said “The industry is seeing some green shoots, recovering from the impact of demonetisation. Ford continues to grow faster than the industry, which bears testimony to our three-pronged strategy of product-led transformation, busting the myth of cost of service and enhancing dealership experience.”

On the other hand, Arun Malhotra, Managing Director, Nissan Motor India, said, “Our growth story has been driven by the continued success of the Datsun Redigo.

It can be expected that the growth momentum will retain in the rest of 2017. Car manufacturers are hopeful of that because of the infrastructure focus in the latest Union Budget. The industry expects that once the Budget proposals get implemented the improvements will be visible.

Steel Insights, March 2017

35

FEATURE

India’s iron ore production likely to surge

Steel Insights Bureau

I

ron ore production in Odisha is expected to cross the peak of 85 million ton (mt) in 2016-17, the state’s highest in a decade. The state is said to have improved its own production rate of 80 mt in the previous financial year. Going by the current production tempo, the state’s iron ore output can also reach 100 mt, setting a new benchmark, according to industry sources.

Despatches of iron ore from the mines have also increased considerably to over 85 mt, due to reviving demand from steel and other end-use industries, some sources feel.

“The extension of lease validity and increased level of mechanisation at some key operating mines had led to the spike in production. We are confident that Odisha’s iron ore production will be over 100 mt by the end of this financial year,” said sources in government departments.

Odisha is the largest iron ore producing state and its ore production went up nearly 50 percent in 2015-16 from 47 mt to 80.86 mt. This came on the back of the state government’s swift orders to extend the validity of mining leases after the enactment of the amended Mines and Minerals Development & Regulation (MMDR) Act. Pan-India iron ore production moved up 20 percent in the previous year, from 129 mt to 155 mt. Market estimates have put this fiscal’s iron ore production in the country to be in excess of 180 mt.

36 Steel Insights, March 2017

Taking advantage of the rebound in global iron ore prices, Odisha was also keen to export its surplus iron ore. Benchmark prices of 62 percent Fe grade iron ore fines have touched a multi-year high of $92 per ton, the highest level since April 2014, buoyed by the strength in Chinese steel prices.

Despite the startling recovery in international global iron ore prices, miners from Odisha have not been able to cash in on the advantage. Iron ore exports till the first week of February from Odisha, have totalled a measly 4 mt despite the state’s potential to export a lot more.

The existing 30 percent duty on highgrade iron ore is a deterrent to exports from Odisha and is denying the state’s exporters a competitive edge in international seaborne trade.

In the Budget for 2016-17, the state government lifted the duty for lower grade iron ore (with iron content less than 58 percent) which gave a fillip to exports from states like Goa that churn out low-grade ore.

Odisha produces mostly higher grade iron ore and has written to the Government of India, asking for removal of the 30 percent export tax.

India iron ore output likely to go up

Iron ore production trend represents an average annual growth of 6.9 percent during 2017-2021.

This is higher than the average contraction of 9.4 per cent y-o-y over 2012-

NMDC’s Nagarnar steel project may be ready by 2017 NMDC Ltd expects its Nagarnar steel project to be ready by 2017-end, Prasant Dash, Executive Director (NMDC Iron & Steel Plant), NMDC Ltd, said.

“The physical work is 83 percent complete. The coke oven would be ready by September and blast furnace by November,” Dash said on the sidelines of a seminar on “Emerging Technologies and Applications for Steelmaking, Continuous Casting, Rolling and Finishing Mills,” organised by Steel & Metallurgy.

The work for the cast iron mill is on and water is expected to be brought from a place 35 kilometers away and executives are working to get a forest clearance for that, he said.

“The plant will be ready for the first phase by year-end,” he said.

NMDC plans to produce flat products from the plant, he added.

2016 following mining bans in the three largest iron-ore producing states of Goa, Odisha and Karnataka, which have since been lifted, a report said.

It said the output growth will be supported by the removal of export taxes in the Union Budget for low-grade ores and the country’s Mines & Minerals (Development & Regulation) (MMDR) Act, which will streamline licensing and reopen closed mines.

“Although the MMDR Act will support ore output growth, the royalties included in the Act will limit the sector’s overall growth potential,” some analysts feel.

Mining giant Vedanta has recently said that the worst phase for the iron ore industry in India is over and exuded confidence that its Goa arm is prepared to sustain the export momentum amidst softening global prices and subdued demand.

Goa produces low grade iron ore (Fe content below 58 percent), which is exported to China. After removal of the mining ban by the Supreme Court in 2014, the state is allowed to mine 20 mt.

FEATURE

Met coal prices show resilience in Feb

November, Mongolian coking coal went for as little as 75 percent below the spot price (thermal coal sold for less than a third of Australian benchmarks) and nowhere near the benchmark contract prices for the first quarter (Q1) 2017 settled between Australian miners and Japanese steelmakers at $285 a ton.

Despite the pullback, metallurgical coal is still trading at more than double multiyear lows reached this time last year. Earlier, in 2011, floods in key export region in Queensland saw the coking coal price briefly trade at an all-time high of $335 a ton.

Going forward, analysts expect the international spot prices to get support from China’s possible move to resume 276day restriction for mining operations in the country. In anticipation of the curbs on China’s domestic output, trading volumes of coking coal futures have already jumped on the Singapore exchange and also in China.

The domestic producers in China are also in favour of a curb on output to arrest the declining trend in prices, the sources said.

Met coke import prices ease

Arindam Bandyopadhyay

A

fter a steady fall since December, seaborne coking coal prices showed resilience at current levels in late February, thanks to the speculations over reimposition of mining restrictions by China.

After a brief pause at the beginning of the month, metallurgical coal prices continued to decline on low procurement by end users, but found support from reports on China’s possible move to curb domestic output, market sources said.

According to information available with Steel Insights, the premium variety hovered around $156 per ton FOB Australia on February 28, 2017 as against $172 per ton FOB Australia on January 31, 2017. Peak Down prices were quoted at $157 per ton FOB Australia on February 28 as compared to $173 per ton FOB Australia on January 31.

There was a recovery in prices in the last 10 days of the month when the Peak Down offers gained about $5 per ton FOB. A

similar uptrend was marked in premium low vol prices, the sources said.

On the whole, however, met coal prices are still down by more than $150 below its multi-year high of $308.80 per ton (FOB Australia for premium hard coking coal) hit in November despite customs data showing a jump in Chinese imports.

China forges more steel than the rest of the world does and the country last year imported 59.2 million tons (mt) of coking coal, an increase of nearly 24 percent over 2015. However, sources point out that Mongolia accounted for 23.6 mt of total imports as imports from Canada and Russia declined by 9.3 percent and 19.4 percent, respectively, while the US exported no coking coal to China.

Mongolia increased production by 85% last year. But it’s not the volume of Mongolian exports that should worry producers in Australia and elsewhere, but the price. As a captive supplier land-locked Mongolia sells its coal for much less than the seaborne price.

At the height of the price boom in

In line with the sharp decline in coking coal prices, met coke import prices dropped in February 2017, posing concern for the domestic coke makers.

According to information available with Steel Insights, met coke import prices stood at $267 per ton CFR India on February 27, compared to $289 per ton CFR India on January 31, 2017.

If compared with the high prices recorded at the start of the year (2017), met coke prices have dropped by around $45 per ton CFR India within a couple of months.

The drop in met coke import prices would partly negate the benefits to be derived from the anti-dumping duty imposed by the government recently. Amid growing imports of low ash metallurgical coke from China and Australia, the government had recommended imposition of a definitive anti-dumping duty in order to remove injury to the domestic industry.

The government had in November 2016 announced a $25.20 per ton anti-dumping duty on imports of met coke from China and a $16.29 per ton duty on imports from Australia. The anti-dumping duty on imports of met coke from any other country was also at $16.29 per ton. The anti-dumping duty shall be effective for a period of five years.

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Corporate

SAIL achieves record export monthly volume Steel Insights Bureau

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teel Authority of India Ltd’s (SAIL’s) concerted efforts on increasing export shares has started to bear fruit. In the month of February, 2017 SAIL achieved the best- ever export monthly volume of steel in the last 10 years.

A total of 1.03 lakh tons of steel was exported last month, which includes the first time shipment of CE marked plates to Europe from the new plate mill of SAIL’s Rourkela Steel Plant. The new 4.3 meter wide plate mill with initial capacity of 1 mt can be augmented to 1.8 mt and is equipped with state-of-art technology which can produce wide range of plates with close dimensional tolerance, perfect flatness and surface finish to meet stringent international standards.

The other products which contribute to this record exports include wire rods, hot rolled coil, billets and slabs. During the current financial year of 2016-17, SAIL has already exported 6.82 lakh tons. The company aims at exporting 10 percent of its total production and at doubling the volumes for next fiscal in FY17-18 which will happen after tripling export volumes during the current fiscal.

SAIL plans to soon diversify its exports basket with cold rolled and galvanised products from its new cold rolling mill at Bokaro, structurals from the new universals section mill at Burnpur and medium structural mill at Durgapur. Through the enriched product offering, the company aims to consolidate its presence not only in the South East Asian market but also in Europe.

SAIL to focus on more value-added products

There is need for higher levels of customer engagement and thus there will be increased proportion of value-added, ready-to-use steel

38 Steel Insights, March 2017

materials in SAIL’s product basket, according to P K Singh, Chairman, Steel Authority of India Ltd. Singh reviewed the marketing performance of SAIL at a meeting.

This was part of a series of interactions held with various units of SAIL for improving the overall performance and increased customer focus.

While broadly outlining the way forward for the marketing team, the SAIL chairman said, “Customer requirements are evolving fast, in these times of ready-made niche products. We need to anticipate their requirements and look into customised products suiting their needs.”

Enthused with the guidance provided by the chairman, the marketing team will be preparing a product-wise detailed plan for increased last mile value-addition which will enable the end consumers to significantly reduce processing at their end. This valueaddition is proposed at locations both inside and outside the steel plants.

The meeting was a precursor to the Annual Business Plan meeting of SAIL, which is organised to finalise targets and goals for the company in the coming year. It is noteworthy that during the past one year, the SAIL chairman has been visiting and interacting with the marketing set-up across the country to further streamline processes and services to make them more customercentric.

SAIL has a very diverse product basket with 500 grades and in 5,000 dimensions from its five state-of-the-art integrated steel plants. The SAIL management is planning to further leverage this potential by ramping up production from its new universal section mill at Burnpur, new cold rolling mill at Bokaro, universal rail mill at Bhilai and new plate mill at Rourkela Steel Plant and by producing more varieties of steel to satisfy even more diverse spectrum of steel users.

SAIL supplies steel to ISRO for 104 satellites launch

SAIL has supplied steel to ISRO for the launch of a record 104 satellites in a single rocket on February 15, 2017.

In this scientific feat, SAIL’s Salem Steel Plant (SSP) has played an important part by way of providing high quality stainless steel for the fuel and oxidizer tanks used in the launch vehicle. SAIL SSP has supplied steel for the iconic Chandrayan and Mangalyan missions too, the company said in a statement.

With this feat of ISRO, India now becomes the first country to script history after launching these record number of satellites in a single rocket. ISRO’s workhorse rocket PSLV created the record today by launching 104 satellites in a single mission from the state-of-the-art space centre at Sriharikota, Andhra Pradesh.

SAIL third quarter net loss narrows to `795 crore

SAIL’s net loss for the quarter ended December 31, 2016 narrowed to `795 crore as higher production resulted in greater sales during the period.

The steel-maker posted a net loss of `1,481.06 crore in the corresponding quarter of the last financial year (2015-16). The total expenses of the company increased to `13,332.3 crore from `11,758.8 crore in the same period, last fiscal.

“With improvement in the share of value-added products like high tensile plates, long rails, CR coils and structurals in our product basket and intensifying our marketing approach we aim to improve our market share,” SAIL chairman P K Singh said.

The company claimed that there was rise in operating profit despite higher global coking coal prices during the quarter impacting margins sharply.

The growth in production and sales is driven by an all-round improvement strategy of the top management by strengthening the entire value chain, Singh said.

The company’s year-on-year employee benefit expenses remained nearly flat at `2,343.27 crore as compared to `2,399.73 crore.

Corporate

Essar Steel to tap Defence sector

many Defence projects. This has given us the confidence and encouragement to expand our product portfolio for this segment.”

The revised Defence Procurement Policy 2016 encourages “Make in India” and supports indigenous manufacturing of defence equipment and spares. The goal is to achieve an indigenisation level of 60 percent to 70 percent, against the existing 40 percent. Apart from saving foreign exchange for clients, it will bring about self-sufficiency and self-reliance, as well as position the country as an exporter of defence goods.

The Union Budget for 2017-18 outlays a Defence expenditure of US $53.50 billion—up from US $30 billion in 2009-10.

About 80 percent to 90 percent of Defence manufacturing in India is dominated by the DPSUs and the OFB. However, several big corporate houses in India have also forayed into this sector and have announced partnerships and expansion plans. While Essar Steel has been servicing the Defence sector for the past 6-7 years, the entry of private players in this sector has enhanced the marketability of its products.

State-of-the-art facilities

Steel Insights Bureau

E

ssar Steel has forayed into the high growth Defence manufacturing sector by developing steel grades which find application in Land and Naval Defence. The estimated expenditure in Defence sector is over US$ 200 billion over the next 5 years.

The company has developed several products which are import substitutes as well as innovated to develop indigenous armour plate for ballistic protection, the company said in a statement.

Wide range of import-substitute products

Essar Steel’s import substitute products have been used in the construction of advance naval destroyers, offshore patrol vessels and floating docks. They also provide ballistic protection to combat vehicles and battle tanks. In addition, Essar Steel products are used in the construction of Coast Guard vessels and in the repair of naval ships.

Essar Steel aims to participate in the indigenisation of products used in Naval Defence, including naval destroyers, offshore patrol vessels used by both Navy and Coast Guard, rocket launchers, floating docks and submarines. In Land Defence, their products are used for battle tanks, motor casing of missiles, mine protected and combat vehicles, military and civil vehicles, artillery guns, morcha and machan.

Alongside growing domestic demand, these products also have a large export potential. Market estimates put the annual demand potential at approximately 2 lakh tons, of which 50 percent is in flat steel and the remaining in structural steel.

Dillip Oommen, MD & CEO, Essar Steel, said: “The Defence sector is witnessing exponential growth. Essar Steel would like to be a part of this growing segment so we can capitalise on our strengths, which include state-of-the-art manufacturing and product development. We have developed an excellent track record by successfully supplying steel to

Essar Steel has set up a 1.5 MTPA stateof-the-art 5-metre-wide steel plate facility at Hazira to meet the requirements of the Defence sector. The plant has three types of rolling capabilities that include thermomechanical controlled rolling, normalised rolling and temperature controlled rolling.

Further, it has two types of heat treatment capabilities—quenching & tempering, and normalising. These capabilities make this mill a versatile mill that is capable of producing any grade of steel for Defence applications. The plate mill is backed by advanced steelmaking facilities and has better control over raw materials through its upstream pellet making facilities. Essar is known for producing high end clean steel required for various sectors like auto, engineering, white goods, yellow goods, power sector, hydrocarbon sector pipe & tubes and Defence.

Product development

Essar Steel has set up an R&D Centre at Hazira that is approved by Department of Science and Technology, Government of India. It has been developing products for the Defence sector for the past seven

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Corporate years, and focuses on application-based product development. The Defence grade steel developed by the company meets the standards of the Defence Metallurgical Research Laboratory, Combat Vehicle R&D Establishment, Directorate of Naval Architecture and Directorate of Naval Design.

Essar Steel India is one of India’s leading integrated steel producers with an annual production capacity of 10 MTPA supported by a 20 MTPA pellet facility. The state-ofthe-art facilities comprise iron making, steel making, and downstream facilities, including a cold rolling mill, a galvanizing and precoated facility, a steel-processing facility, an extra-wide plate mill and 3 pipe mills with coating facilities.

Essar Projects bags 100-km natural gas pipeline deal

Essar Projects, a leading engineering procurement & construction (EPC) company, recently won a contract for a 100km pipeline from GSPL India Gasnet Ltd (GIGL).

The project involves laying of natural gas pipelines, with diametres ranging from 12 inches to 18 inches, between Jalandhar and Amritsar, a critical segment of the 2,100km Mehsana–Bhatinda–Jammu–Srinagar Pipeline (MBJSPL) project that passes through 29 districts in five states.

The MBJSPL project has been initiated

40 Steel Insights, March 2017

Essar Power Hazira attains full capacity utilisation The 2x135-MW power project of Essar Power Hazira Ltd, a subsidiary of Essar Power Ltd, at Hazira is now operating consistently at close to 100 percent capacity utilisation.

The achievement is significant because it comes close on the heels of the commissioning of the second unit, which occurred just three months ago, a company press release said.

Importantly, it is also an indicator for the increased capacity utilisation of its captive client, Essar Steel’s 10 million-ton Hazira Steel Complex.

The plant can run on multiple fuels, like coal, corex fines and Corex gas, simultaneously.

It can also utilise excess gases from the process units of steel-making operations. Over the last few weeks, it has lived up to its Green commitment by using a higher proportion of by-products from the steel-making process, including coal fines and Corex gas.

The plant is also helping bring down Essar Steel’s power procurement cost, while lending unmatched reliability and flexibility to the steel-making process. Essar Steel has increased its capacity utilisation from 30 percent to 80 percent over the last one year.

K V B Reddy, CEO, Essar Power, said: “The year is turning out to be an important one for Essar Power. Close to 80 percent of Essar Power’s targeted capacity of 6,100 MW, which comprises both captive and IPP assets, have been made operational. In the last two years, increased coal availability, both from domestic and overseas suppliers, as well as the strong operational efficiencies harnessed by Essar Power’s world-class technical team, have helped improve our performance significantly.”

In October 2016, Essar Power commissioned unit 2 of phase I (2X30 MW) of the 2x60-MW Paradip power project. Earlier in May, the company restarted the first unit of its 2x600-MW Mahan power project after a 19-month shutdown. to cater to the growing demand for natural gas in India, which is the world’s third largest energy consuming country and accounts for nearly a third of the global consumption.

GIGL was incorporated in 2011 as a special purpose vehicle to build the pipeline, and is promoted by Gujarat State Petronet Ltd (GSPL), along with Indian Oil, Bharat Petroleum and Hindustan Petroleum. The Jalandhar-Amritsar section is among the three sections for which GIGL recently completed the tender evaluation process.

Essar Projects has a proven track record of executing cross-country pipelines that carry oil & gas, water, as well as iron ore slurry through challenging geographies and tough terrains.

Till date, the company has successfully executed over 5,500 km of cross-country pipelines in India and overseas, servicing clients like GAIL, GSPC, Indian Oil, Hindustan Petroleum, Bharat-Oman Refinery, Takreer, Gasco and Ambatovy Minerals.

Shiba Panda, Managing Director, Essar Projects, said: “We are proud to be associated with a project that is integral to building a countrywide gas pipeline grid for India. This win reinforces our expertise as a world-class EPC contractor in the pipeline segment.”

Corporate

Tata Steel Noamundi iron mine bags award Steel Insights Bureau

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ata Steel Noamundi Iron Mine (NIM) bagged the first prize in the overall performance category in the 17th Mines Environment and Mineral Conservation (MEMC) week organised under the aegis of the Indian Bureau of Mines (IBM), Kolkata Region, held on February 25, 2017.

NIM also got the first prize under the category of Five Star Rating System among 14 mines that participated in the MEMC Week. It needs to be mentioned here that NIM is the first mine in the country to conduct pilot launch of drone application in mine monitoring.

The other honours bagged by NIM include first prizes in Mineral Beneficiation and Sustainable Development and second prize in the Afforestation and Best Stall categories. Ranjan Sahai, Controller General (I/C), IBM graced the occasion as the Chief Guest.

NIM is one of the best open cast iron ore mines in the world with state-of-the-art and sophisticated mining operations and ensures continuous improvement and upgradation of processes towards sustainable mining and responsible utilisation of natural resources.

Hot Metal production at BF of Tata Steel Kalinganagar crosses 2 million ton

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ata Steel Kalinganagar, the largest Greenfield steel plant of India located in Kalinganagar Industrial Complex in Jajpur district of Odisha, has achieved yet another milestone with the hot metal production at its Blast Furnace crossing 2 million ton on February 19, 2017.

The plant, which boasts of the largest operating Blast Furnace of the country with 4330 cubic metre capacity, was blown in on February 28, 2016. The Blast Furnace achieved the first million ton production of hot metal on October 9, 2016, Tata Steel said in a statement.

It took about 133 days to reach 2 million ton production from 1 million ton.

The second million ton was achieved at a production rate of 7520 tons per day, which is at an operating rate of 2.8 million ton per annum.

Subsequent to the commencement of commercial production in May 2016, the state-of-the-art steel plant has achieved several operational milestones. Besides, it has also started exports of HR Coil and

Tata Ferro-shots to various countries. Tata Steel continues to uphold the high standards of sustainable practice even as it achieves production records.

Tata Steel’s Katamati Iron Mine wins Award

T

ata Steel’s Katamati Iron Mine was conferred the Best Green Organization of the Year Award at the Global Green Future Leadership Awards organized by World CSR Day on February 18, 2017 in Mumbai.

According to a company release, Rahul Kishore, Head (Mining Operations), Katamati Iron Mine, Tata Steel received the award on behalf of Tata Steel from Jordan Reeves, Consul General of Canada in Mumbai.

The Katamati Iron mine has been engaged in environmental protection efforts since years and has successfully implemented Environmental Management System as per the requirements of ISO 14001:2004 and certified thereunder.

Expressing gratitude on receiving award, Pankaj Satija, General Manager (Ore, Mines & Quarries), Tata Steel said, “Tata Steel has always been committed towards the environment protection. Our focus has always been responsible environmental practices and optimal resource utilization while upgrading skills of workmen through training as technologies evolve. We are pleased to win the award which reflects and acknowledges our pledge towards a sustainable environment along with safe and sustainable mining processes. At Tata Steel, we have believed in safe and responsible mining, which is the crux of our business philosophy and we are firmly dedicated towards it.”

The Global Green Future Leadership Awards is for any organization that participates in environmentally friendly or green activities to ensure that all processes, products, and manufacturing activities adequately address current environmental concerns while maintaining a profit. In other words, it is the Green Future that meets the needs of the present world without compromising the ability of the future generations to meet their own needs. It is the process of assessing how to design products

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Corporate that will take advantage of the current environmental situation and how well a company’s products perform with renewable resources.

5 star Indian Bureau of Mines rating for 3 NMDC mines

I

ndia’s largest iron miner NMDC’s two iron ore mines and one diamond mine received 5 star rating by the Indian Bureau of Mines, (IBM) under the Ministry of Mines, GoI, as per an official release to the Bombay Stock Exchange (BSE).

The two iron ore mines are Bailadila, Bacheli Complex, Chhattisgarh and Donimalai, Karnataka. The third is the Diamond Mining Project, Majhgawan, Madhya Pradesh.

The star ratings are awarded to the mining leases for their efforts and initiatives taken for implementation of sustainable development framework (SDF). The best performing leases are given 5 star ratings.

The parameters of evaluation include carrying out scientific and efficient mining, adoption of international standards, addressing social impacts, etc.

JSPL third quarter net narrows by 48% to `455 crore

J

indal Steel & Power (JSPL) saw its consolidated net loss narrowing by 48 percent to `455 crore for the quarter ended December 2016. The Naveen Jindal-led firm had clocked a net loss of `882 crore in the corresponding quarter in 2015-16.

The turnover of the company saw a 25 percent growth to `5,408 crore during the quarter under review as against `4,336 crore in the same quarter a year-ago.

“We are heading towards a turnaround with a good performance,” JSPL’s Managing Director and CEO Ravi Uppal said.

He further said, buoyed by strong performance, the company will continue to focus on increased volumes of steel, improved product mix with a focus on high-yield products, increased production in all mines in India and abroad, which would enhance revenues as well as the operating margins in the coming quarters.

The company said its consolidated steel production stood at 1.15 million tons, up 7 percent from the corresponding quarter last fiscal while sales were up 18 percent at 1.16 mt.

The company said its consolidated net debt as on December 31, 2016 was maintained at similar levels as in the previous quarter. The consolidated debt of the company is about `45,000 crore.

“JSPL remains committed to meeting all its debt commitments and the company is aiming to bring down the annual cash outflow in terms of repayments and interest by utilising various schemes provided by the government, including but not limited to 5/25 and S4A,” JSPL said in a statement.

For its overseas debt, the company is in constant discussions with its lenders to restructure and refinance its loans.

About Jindal Power Ltd (JPL) it said the company took multiple steps to improve its operational performance, including reduction in fuel cost, auxiliary consumption and selective sale of power to the national exchange to improve its financial performance.

“As a result of these measures, the EBITDA margin of JPL improved to 35 percent in Q3 FY17 from 22 percent in Q3 FY16,” it said. About global ventures, the company said Jindal Shadeed produced 0.31 million tons of crude steel as against 0.29 million tons in Q3 FY16.

The rebar mill at Oman is progressively ramping up production and achieved its highest production of 0.14 million tons this quarter.

It said coal production in Mozambique, which was resumed in early October, has increased steadily to a level of 1.2 mtpa by the end of December 2016.

NALCO Q3 net dips 2.7% amidst a dull metals sector

T

he net profit of National Aluminium Company Limited (NALCO), decreased 2.70 percent in the third quarter (Q3) of 2016-17 on a year-on-year (y-o-y) basis due to slowdown in aluminum and the overall metals sector.

NALCO registered a net profit of `144 crore in October-December, 2016, as against `121 crore in the preceding quarter and `148 crore in the corresponding quarter of the previous fiscal, as per an official release.

42 Steel Insights, March 2017

Corporate It is noteworthy that NALCO has registered profits in all the three quarters of the present fiscal, despite the entire global aluminium industry reeling under a severe market slowdown and many companies reporting losses.

The net profit for the 9 months ended December 2016 stood at `400 crore, against `573 crore in the previous fiscal. The net sales for the 9 months of the current fiscal stood at `5,071 crore as compared to `4,866 crore in the corresponding period of the previous fiscal.

The production of bauxite at NALCO stood at 5.32 million tons (mt) in the first nine months of 2016-17, up 16 percent compared to 4.57 mt in the same period of the previous fiscal. The production of alumina hydrate and metal stood at 1.53 mt and 0.28 mt respectively till December of the current fiscal.

Tata Steel to sell speciality steel biz to Liberty House

T

ata Steel Ltd has said its British arm has signed a definitive agreement to sell its speciality steel business to Liberty House Group for 100 million pounds ($125.55 million). The deal covers several South Yorkshire-based assets, including the electric arc steelworks and bar mill at Rotherham, Tata Steel said in a filing to Indian stock exchanges.

Speciality Steels directly employs about 1,700 people, making steel for aerospace, automotive, oil and gas businesses, it said.

Tata and Liberty House had entered into exclusive talks in November as the Indian group seeks to offload its money-losing assets and restructure European operations.

NMDC appoints Saraswati Prasad as govt director

N

MDC has appointed Saraswati Prasad as government director on the board of directors with immediate effect.

Prasad is currently the additional secretary and financial advisor (AS&FA) in the Ministry of Steel. She took over from Bharathi S Sihag, former Special Secretary and Financial Advisor, Ministry of Steel.

Sihag ceased to be a government nominee director on the board of NMDC Limited with effect from February 08, 2017 in terms of the said order of the Government of India, Ministry of Steel.

Tata Steel returns to black in Q3

T

ata Steel returned to black in the third quarter (Q3) of the current financial year of 2016-17 with a profit after tax of `232 crore against a loss of `2,748 crore in the same quarter in the previous fiscal. The company had suffered a loss of `49 crore in Q2.

The consolidated Q3 revenues went up 7 percent q-o-q to `29,392 crore against `27,471 crore in Q2 and 14 percent against `25,767 crore in the same period of the previous fiscal.

The growth was largely driven by strong performance from Indian operations.

Consolidated steel deliveries during the quarter increased 5.2 percent to 6.11 million tons from 5.81 mt in same quarter last year.

Standalone turnover, at `14,106 crore, was up 39 percent compared to `10,145 crore seen in the same quarter of the previous fiscal.

The Kalinganagar steel plant crossed 1.5 million tons of hot metal and 1 million tons of hot rolled coil production since commissioning in May 2016.

Deliveries grew by 14 percent sequentially and 27 percent y-o-y, outperforming the domestic markets which grew by 3 percent sequentially and contracted by 2 percent y-o-y.

Automotive sales grew 20 percent y-o-y, while industrial products, projects and exports vertical witnessed 47 percent y-o-y growth.

Branded products grew by 13 percent y-o-y, despite the impact of demonetisation.

The performance of the ferro alloys and minerals division registered sharp improvement on the back of improved market conditions. Operating profit of the division, at `302 crore, was higher by `141 crore sequentially and `267 crore y-o-y.

EBITDA improved to `3,393 crore, up 70 percent sequentially and 110 percent y-o-y on the back of supportive realisations,

strong growth in deliveries and ramp-up of the Kalinganagar plant.

The Jamshedpur plant continues to be the benchmark in India for coke and pulverised coal injection (PCI) usage and achieved the lowest best-ever coke rate of 361 kg/ton of hot metal and highest best-ever PCI rate of 179 kg/ton of hot metal in Q3.

Commenting on the Q3 results, T V Narendran, Managing Director, Tata Steel India and South East Asia, said: “Tata Steel recorded strong sales this quarter as the strength of our franchise helped us counter head-winds due to demonetisation. While the broader market was affected by lower rural sales and adverse consumer sentiments, we were able to increase overall volumes by 14 percent sequentially and register strong growth across all our target customer segments. Further, our focus on cost improvement initiatives and our integrated operations helped us to contain the impact of rising raw material prices.”

European operations

Liquid steel production of 2.68 million tons was flat on a sequential basis, but 4 percent lower than Q3 FY16. Deliveries of 2.37 million tons were 3 percent higher sequentially, but 13 percent lower y-o-y following the strategic decision to focus on higher-value added products in the UK. EBITDA for the quarter improved to `610 crore, compared with a loss of `757 crore a year earlier as a result of a more competitive pound, a lower UK cost base and more favourable market conditions. Higher raw material and energy costs in Q3 FY17 led to EBITDA being `425 crore lower sequentially.

Differentiated product sales continued to gather pace, with the proportion of total sales rising to over 35 percent and their value rising by almost 30 percent y-o-y.

South East Asian operations

Revenue for South East Asia operations grew by 11 perceny y-o-y to `1,985 crore on the back of improved deliveries at Tata Steel Thailand and supportive realisations.

EBITDA increased by 82 percent sequentially and 138 percent y-o-y on better spreads, reflecting improved market conditions at both NatSteel & Tata Steel Thailand.

Gross debt remained stable at `84,752 crore as on December 31, 2016. Net debt was `76,680 crore.

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GOVERNMENT

Govt expects 7-7.5% growth in steel demand by 2030

Steel Insights Bureau

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he government is expecting a compound annual growth rate in steel demand of 7-7.5 percent up to 2030 when the target is 300 million tons of production volume is expected to be achieved, as is couched in the draft steel policy.

Giving such indications, Anupam Prakash, Director in the Ministry of Steel, informed Steel Insights on the sidelines of a ferro alloy summit organised by the Indian ferro Alloy Products Association (IFAPA) that if that is the scenario, then the 300 mt target by 2030 is eminently achievable, adding that these numbers have been calculated keeping a GDP growth of 7-7.5 percent in mind.

However, this has not been reflecting in the past few years’ DGP growth figures.

Currently, steel demand is at a mere 4 percent but Prakash shot it down by saying that is essentially because the global economy is down.

“You have to see long term, then these figures will match. There is a demand potential. The average steel consumption in India is a mere 65 kg per person against the global average of 208 kg. The requirement has to come from the user industries. If these grow the steel sector will definitely grow.

44 Steel Insights, March 2017

We in the government are the facilitators,” Prakash insisted.

Pointing out that since, unfortunately, many industry players were unaware – as it came to light at several conferences held recently – on the ways Make in India can happen with the help of domestic players, he said the government is holding demand conferences across the country. The first one will be held in Gangtok followed by Ludhiana. These conferences will intend to inform stakeholders as to how demand can be increased.

“There is great potential and the ministry is making all efforts to increase demand from the consumption side,” he said.

For ferro alloys, this is important information because the sector as a whole needs to know where the future demand is going to come from and in which sector or sub-sector there is domestic demand potential as well as scope for exports.

The Ministry of Steel is facilitating achievement of the target of production of 300 million tons (mt) by 2030 and ferro alloys and steel go hand in hand. Once the steel sector develops then the ferro alloy industry will also come up in tandem.

Power tariffs

While observing that there was optimism as well as a hint of many challenges, Prakash

acknowledged that there were four key issues bothering the ferro alloys sector and the ministry was actively looking into these. One key challenge the ferro alloy producers are facing is, of course, the high rate of power tariffs. Others are neutralisation of the rate of taxation, free trade agreements and the fourth issue is related to the export incentive scheme.

Most ferro alloy units are located in states not regarded as that progressive compared to many others and are dominated by tribal areas. Only in the state of Andhra Pradesh a reduction of `1.50 paise per unit was possible.

Malaysian and Indonesian manganese alloys have very low power tariffs compared to India. In fact, the difference in power tariffs in India compared to Malaysia is almost $20 per megawatt. Consequently, cheap imports from these South East Asian countries are entering India. In 2016, a volume of 3.65 lakh tons of extra capacity entered the Indian market as cheap imports and another 1.80 lakh tons are expected in 2017.

Amongst all the major ferro alloy producing countries like South Africa, Turkey, Iran etc, India’s power tariff is the highest. The ferro alloy industry is highly power-intensive, consuming almost 3,600 units per ton and 50-100 units per ton in case of other ferro and noble alloys.

The states where the ferro alloy units are

GOVERNMENT located are power-surplus but because of the cross-subsidy non-captive power players are suffering. In Andhra Pradesh, the moment the power tariffs were reduced by `1.50 per unit, around 25 percent ferro alloy units resumed operations. Prakash insisted that this is good news for the sector because once that sense of competition comes in amongst the states, power, which, one can say is the raw material for the ferro alloys sector, can come down, he observed.

“If Telengana and Andhra Pradesh can promote the ferro alloys industry then other states can too. And in this the Ministry of Steel can be a facilitator,” he reminded.

Tax neutralisation

In what sounded like good news to the ferro alloys industry, the issue of neutralising the rate of taxation under the Goods & Services Tax (GST) regime is being taken up by the Ministry of Steel.

With regard to tax neutralisation, Prakash informed that the new taxation regime of GST does not consider the electrification Act as a part to be subsumed in the value chain. “This is a concern and we are aware of it and taking steps from the ministry regarding this.” Prakash sounded almost comforting when he said this to a large gathering from the ferro alloys industry at the summit organised by IFAPA.

FTAs

The third issue is that of free trade agreements (FTAs) with Malaysia and the government is aware of this challenge. “Because the market is becoming competitive, these Indian players too have to become competitive with regard to raw material resources, power tariff structures in a particular state where a plant is located etc. We have to make efforts to convert our advantages into competitiveness,” said the steel ministry director, adding that Indian ferro alloy manufacturers’ raw materials, production process and export competitiveness have to increase.

Export incentive

The fourth issue is related to the export incentive scheme. Prakash reminded that the Merchandise Exports from India Scheme (MEIS) or any other incentive scheme are all countervailed but these should not be challenged in any World Trade Organisation (WTO) forum.

FTAs in other parts of the globe as well as in India, like the MEIS, or various incentive schemes for copper etc are all countervailed.

That is, if India demands anything extra and if this is not on the basis of actuals then these can be countervailed by other countries.

“The advantage will be lost if we do not import any scheme which is not as per WTO guidelines. So whenever we demand

Consumption of total finished steel in rural India

Year

Quantity (mt.)

% change over last year

2013-14

9.26

2.4

2014-15

9.49

2.5

2015-16

9.74

2.6

Source: Joint Plant Committee JPC

something, we must be aware that these are the cost inputs and we are talking about the expected inputs and neutralisation of those inputs in our final export product,” Prakash said, adding that this is something the government is willing to consider – that these schemes should not be challenged in any WTO forum.

Logistics

The ministry has proposed the idea of dedicated rail freight corridors for the steel sector in the eastern part since Railways handles large steel and iron ore cargoes from this region. What is required is to match the requirement of the steel sector with the future plan of Railways so that the sector’s needs as well as Railways freight targets are met. A task force has been set up between the steel ministry and Railways regarding this.

Improved consumption in rural areas

The government has taken a number of initiatives to improve steel consumption, especially in rural areas. The consumption of total finished steel in rural area stood at 9.74 mt in 2015-16, up 2.6 percent compared to 9.48 mt in 2014-15, as per data released by the Joint Plant Committee (JPC), under the Ministry of Steel.

On a year-on-year (y-o-y) basis, consumption increased 2.5 percent and 2.4 percent respectively in 2014-15 and 2013-14.

In India, about 50 percent steel trading is handled by the unorganised and secondary sector and rural steel consumption mainly belongs to this segment. It is also a fact that the level of consumption of steel in a country depends on a number of factors, including the stage of development it is in, and its speed of economic growth, etc.

During the period spanning 2013-14 to 2015-16, demand for steel was not very responsive. In that context, the increased demand for steel gives a positive angle for manufacturers.

Steel Insights, March 2017

45

market report

Global crude steel output up by 1.46% in Jan m-o-m Sanjoy Bag

W

orld crude steel production for the 67 countries reporting to the World Steel Association (Worldsteel) was up by 1.46 percent to 136.51 million tons (mt) in January 2017 compared to 134.55 mt reported in December 2016.

Crude steel production for January 2017 was up by 6.54 percent compared to 128.13 mt in January 2016.

In January 2017, Asia produced 93.41 mt of crude steel, an increase of 6.66 percent over the same month in 2016. The European Union (EU) produced 13.82 mt of crude steel in January 2017, up by 2.95 percent compared to the same month in 2016. North America’s crude steel production in January 2017 was at 9.44 mt, increased by 1.83 percent than in the corresponding month of 2016. While that of South America, Africa and Middle East had produced 3.56 mt, 1.17 mt and 2.57

mt of crude steel in January 2017, which is respectively 9.58, 2.24 and 24.54 percent compared to the same month in 2016.

China, the single-largest producer, manufactured 67.20 mt of crude steel in January this year, an increase of 6.31 percent over the corresponding period in 2016, when production stood at 63.21 mt and month-onmonth production went up by 1.40 percent compared to the December 2016 figure of 66.29 mt.

Elsewhere in Asia, Japan produced 9 mt of crude steel in January 2017, up by 2.62 percent compared to the same month last year. India’s production for January 2017 stood at 8.40 mt, an increase of 13.24 percent compared to January 2016. South Korea produced 5.86 mt during the same period; up by 3.41 percent over the same month in 2016. Thailand produced 0.31 mt during January 2017, 24 percent increase over the same month last year. Pakistan produced

0.34 mt of crude steel in January 2017, an increase of 33.33 percent compared to the same month in 2016.

In the EU, Germany produced 3.65 mt of crude steel in January 2017, which is 1.2 percent higher compared to the same month in 2016. Italy produced 1.83 mt of crude steel in January 2017, up by just 0.3 percent compared to that in January 2016. Spain’s crude steel production was 1.16 mt in January 2017, a decrease by 4.2 percent compared to January 2016. France produced 1.15 mt of crude steel in January 2017, decreased by 14 percent compared to that in January 2016.

In January 2017, Russia produced 6.18 mt of crude steel, up by 11.6 percent compared to the same month in 2016. Ukraine’s production was 2.1 mt in January 2017; up 8.5 percent over the same month in 2016.

In January 2017, the US produced 6.87 mt of crude steel, 6.5 percent higher compared to January 2016 and Turkey’s crude steel production for January 2017 was 2.93 mt, an increase of 12.8 percent compared to January 2016.

The 67 countries’ utilisation ratio of crude steel capacity in January 2017 was 68.5 percent and is only 3.4 percent point higher than January 2016 and compared to December 2016 it is only 0.9 percent point higher.

World crude steel production Jan-16

Feb-16

Mar-16

in ‘000 tons

Apr-16

May-16

Jun-16

Jul-16

Aug-16

Sep-16

Oct-16

Nov-16

Dec-16

Jan-17

Jan 17 / Jan 16 (% change) 2.95% 11.56% 9.74% 1.83% 9.58% 2.24% 24.54% 16.59% 6.31% 13.24% 2.62% 3.41% 33.33% 16.88% 24.00% 6.10% 6.66% 6.21%

European Union (28) 13,428 13,081 14,124 13,493 14,481 13,774 12,986 11,974 13,261 14,051 13,492 13,066 13,824 Other Europe 2,785 2,587 2,951 3,114 3,305 3,153 2,881 3,121 2,891 3,200 3,173 3,111 3,107 C.I.S. (6) 8,142 8,154 8,742 8,701 8,904 8,274 8,772 8,358 8,230 8,463 8,546 8,841 8,935 North America 9,274 8,809 9,483 9,034 9,590 9,453 9,722 9,548 8,943 9,122 8,844 9,409 9,444 South America 3,251 3,180 3,211 3,029 3,302 3,293 3,444 3,491 3,274 3,514 3,184 2,899 3,562 Africa 1,142 912 1,032 1,035 1,023 965 936 954 855 983 1,021 1,053 1,168 Middle East 2,061 2,175 2,324 2,334 2,500 2,388 2,232 2,216 2,351 2,378 2,555 2,507 2,567 Africa/Middle East 3,204 3,087 3,357 3,370 3,524 3,353 3,168 3,171 3,205 3,361 3,576 3,559 3,735 China 63,214 58,515 70,650 69,420 70,504 69,470 66,807 68,570 68,170 68,510 66,290 67,220 67,200 India 7,418 6,940 8,059 7,800 8,044 7,785 8,082 8,141 7,880 8,267 8,010 8,397 8,400 Japan 8,772 8,355 8,648 8,498 8,841 8,760 8,886 8,918 8,442 9,062 8,618 8,711 9,002 South Korea 5,667 5,300 5,430 5,670 5,807 5,468 6,009 5,866 5,716 5,961 5,770 5,858 5,860 Pakistan 255 240 260 395 350 260 210 210 260 290 280 340 340 Taiwan, China 1,600 1,500 1,775 1,720 1,810 1,750 1,890 1,890 1,770 1,860 1,765 1,825 1,870 Thailand 250 235 250 245 255 345 360 360 340 350 340 310 310 Vietnam 407 290 392 410 384 473 443 434 497 468 467 491 431 Asia 87,582 81,375 95,464 94,158 95,996 94,312 92,686 94,389 93,075 94,768 91,540 93,151 93,413 Oceania 466 429 382 417 436 581 526 507 527 513 513 512 495 Rest of the world 64,917 62,187 67,063 65,896 69,034 66,724 67,378 65,989 65,236 68,481 66,579 67,329 69,314 6.77% except China World 128,131 120,702 137,713 135,316 139,538 136,194 134,185 134,559 133,406 136,991 132,869 134,549 136,514 6.54% Source: WSA

46 Steel Insights, March 2017

TECHNOLOGY

Primetals to modernize continuous slab caster for Baosteel Steel Insights Bureau

P

rimetals Technologies has received an order from the Chinese company, Baoshan Iron & Steel Co. Ltd. (Baosteel), to modernize continuous slab caster no. 3 in the company’s steel works no. 1 in Shanghai.

The machine head and the complete strand-guiding system will be replaced. The goal of the modernization is to produce highquality slabs for demanding applications. The modernization will also increase the maximum slab thickness to 357 millimeters.

The plant’s production capacity is around 2.3 million tons per annum. Once cast, the slabs are further processed in Baosteel’s plate rolling mill and hot rolling mill. The modernized casting plant is scheduled to come into operation in the first quarter of 2018.

Primetals develops automatic testing system for temperature sensors of molds

With the Automatic Thermocouple Checker, Primetals Technologies offers operators of continuous casting plants a solution for standardized and reproducible heating and testing of thermocouples in the copper plates of molds.

Unlike conventional test methods, for example with the aid of gas torches, damaging of copper plates is ruled out. In the case of the Automatic Thermocouple Checker, heating of the couples is reproducible and is done by electronic means. Each thermocouple belonging to a mold is tested under identical conditions and almost fully automatically.

With the aid of uniform heating of the couples, not only defective elements can be identified, but poor thermal contact caused by soiling or insufficient pressing force onto the thermocouple can also be

Steel Insights, March 2017

47

TECHNOLOGY determined. For quality management, the measured data gathered can also be stored for later evaluation. Temperature distribution in the mold is measured with the aid of thermocouples.

It is important that knowledge about this distribution is as precise as possible in order to ensure that any sticking in the mold is detected quickly enough. Such stickers can lead to openings in the cast shell, resulting in damage averaging 100,000 euros. Until now, thermocouples have been tested by various manual methods. In doing so, the individual thermocouples are heated up to different extents, which makes interpretation of the measured results difficult. Moreover, heating of thermocouples can damage the copper plates of the molds.

Primetals to modernize continuous caster for Georgsmarienhütte GmbH (GMH)

Georgsmarienhütte GmbH (GMH), a German steel producer, has awarded Primetals Technologies an order to modernize the company’s six-strand continuous bloom caster at its main site in Georgsmarienhütte.

The goals of the refurbishment are to equip the continuous caster to meet future market requirements, improve the plant’s product quality, increase its productivity and availability, and allow greater flexibility in the use of the production facilities. This stage in the modernization will be completed in the summer of 2017.

Georgsmarienhütte GmbH (GMH) is one of Europe’s leading suppliers of raw steel,

48 Steel Insights, March 2017

steel bars, semifinished products, and bright steel made of quality and engineering steels.

GMH makes around 80 percent of its sales to the automotive industry and its suppliers.

The company also supplies steels for chains, machine and hydraulic components.

Tyasa orders production management solution for steel making plant

Mexican steel producer Tyasa, has awarded Primetals Technologies an order to supply a production management solution (level 3) for its existing steel making plant, billet caster and new Castrip based coil production line in Ixtaczoquitlan.

The Production management solution steers the order based production utilizing product routing information and corresponding process instructions for the individual processing units. A seamless material tracking along the entire production route from heat creation in the electric arc furnace down to the final coil product provides Tyasa with the genealogy information customers require for flat products. The project is due for completion by early 2018.

Primetals Technologies’ Production Management solution integrates the business level with the automation level by translating sales orders for coils received from SAP into production orders including routing information and process instructions for the production units to allow the product specific setup of the aggregates.

Based on released production orders, Tyasa’s planning department builds production schedules to be loaded into the system’s schedule execution module. After each production step, e.g. producing a new hot rolled coil at Castrip, production results are collected. The horizontal integration of the different automation systems ensures one process step’s production feedback is used as part of the process instructions for the next step along the production route. To keep track of work in progress and inventory the solution also consists of a coil yard management module providing a consistent yard image and easy to use material search functions.

Opinion

‘Induction furnaces are the biz of the future’

sophisticated and better regulated in terms of their performance parameters. In the early 2000s, the rolling mills came under the UNDP programme when innovations in heat management became the key factor.

But it was the induction furnaces, with their innovations in post-melting technology, and the sponge iron players and their rotary kilns with coal as the fuel that emerged upon the world as the cheapest way to make steel.

This growth trajectory, in the present times, appears to have plateaued off; hence, in order to grow in the world, India needs yet another technology leap similar to the one that has brought us here .

“We can observe the state of the world in terms of prospects of steel technology,” she said.

Technology can be classified in terms of the following; 1. Those which pertain to capacity expansion, or a change in the scale of production. Integrated steel to induction furnace. Or to levels of capacity integration, sponge iron to induction to rolling mills. The world over countries are shifting towards electric steel making because of their small sizes and flexibilities.

2. Those which pertain to new products, the ultra-thin, light auto sheets of Japan or the recent boron long products of China.

This technology has almost peaked out.

Steel Insights Bureau

W

e have walked many steps through control, liberalisation, coming of the induction furnaces, the rise of the sponge iron industry, the emergence of pulverised coal technology, coal gassifications, ore beneficiations and beyond in India’s journey from the eighth to the third-largest steel-maker in the world.

It has been quite an experience, Susmita Dasgupta, Joint Chief Economist, Joint Plant Committee, Ministry of Steel, said at a technology seminar organised by Steel and Metallurgy magazine.

Technology is very important for an economist because capitalism, which is the present mode of production, thrives for its growth on technological innovations. Joseph

Schumpeter has once said that any industry which grows necessarily does so on a rising curve of technology innovations; when industries collapse, they do so because the technology has stagnated. Technology here does not pertain to the level of technology or to the degree of sophistication but to the rate of growth in its innovation, Dasgupta opined.

“We see this in the case of India’s journey from the eighth largest to the third largest steel-maker in the world. The technology growth that supported this achievement was led not by our integrated plants but by the induction furnaces, the sponge iron plants and the rolling mills.”

The standalone rolling mills had a very good run in the late 1970s and the early 1980s when a slew of mechanical innovations made them faster, more

3. Globally, there is over-capacity in steel, something that the Indians do not seem to acknowledge; steel demand will eventually rise, says the Ministry of Steel and after that the industry; this is not to be so. There are complex economics to show that steel in the world will always be over-capacitated precisely due to the stagnation in technology.

4. There can be an improvement in the productivity due to changes in designs, source of heat, or through mechanical improvements, but even here the scope for incremental improvement is limited.

5. The major thrust of steel is now the management of pollution, control of emissions and the treatment of effluents.

Steel’s technology involves metallurgy, chemistry, thermodynamics, material sciences related to extraction, machining requirements, a slew of technologies actually

Steel Insights, March 2017

49

Opinion that need new levels of skills and dedication and research in basic sciences. Unfortunately, our technologies are too gadget-based, operations-based.

“We have a technology programme in the ministry and there are talks of spending 2-3 percent on R&D for the steel companies… But … projects submitted are one-offs, here and there. Can we think of a concerted policy on technology? Is it possible to plan ahead for technology?

For this we need economics to anticipate technology,” Dasgupta observed.

When mill products are converted through pencil ingots they do better. Only next are the integrated producers; the standalone billet re-rollers seem to be doing badly.

So far, the industry has observed that those who use pencil ingots do the best; hence, technologies that pertain to products made out of pencil ingots and hence the induction furnaces, would still be valued. “No wonder then we arrive at continuous casting in the induction furnaces as the next big step in technology,” Dasgupta said.

“But continuous casting brings us into the realm of metallurgy because the technology requires various ratios to be right.

What I gather from my discussions with many people is that magnesium to sulphur or carbon to phosphorus technologies pertain to metallurgy and not only to a continuous caster as a gadget,” she said.

“I do see a lot of integration now between induction furnace and the rolling mills; the standalone rolling mills as purely finishing mills will take a sidestep and the integrated steel plants are strong contenders ,” the official said.

It is said that necessity is the mother of invention but there is an equally strong opinion which says that no one does anything

I do see a lot of integration now between induction furnace and the rolling mills; the standalone rolling mills as purely finishing mills will take a sidestep and the integrated steel plants are strong contenders. until and unless ensured of a minimum of gains. The area of continuous casting will place the integrated plants and the induction furnaces in direct competition with one another and the Quality Control Orders will ascertain that the advantages of the large players are intact.

The induction furnaces usually serve the domestic segment where the integrated steel plants are trying to enter desperately albeit at lower margins. “If we allow the integrated plants to have a field day here we are lowering the overall margins of the steel industry as a whole and side-tracking the prospects of the induction furnaces. Induction furnaces are the business of the future – it is a segment that should survive,” Dasgupta opined.

Standalone plants are important as well. The new kinds of uses are emerging in terms of infrastructure projects and high rise apartment houses, shopping malls, ports, stadia and so on. Finishing lines are very important to service such steel, much of which will continue to be imported from abroad.

Many of the induction furnaces are showing renewed interest in melting scrap.

This is due to the issues over quality of sponge iron. The focus of technology is towards metallurgy and it is here that melting scrap emerges once again with renewed importance. Scrap refining and scrap sorting

It was the induction furnaces, with their innovations in postmelting technology, and the sponge iron players and their rotary kilns with coal as the fuel that emerged upon the world as the cheapest way to make steel. This growth trajectory, in the present times, appears to have plateaued off; hence, in order to grow in the world, India needs yet another technology leap similar to the one that has brought us here.

50 Steel Insights, March 2017

might well be the focus of the investments into new technology. But the price margins are much higher between DRI and pencil ingots, leaving a larger surplus to work with technology around pelletisation and beneficiation than around scrap.

DRI has risen into new prominence now among countries which have discovered natural gas. These countries are rapidly setting up their own electric furnaces or exporting raw materials for those who have such furnaces to make billets.

Looking at the price ratios, we see that billets are now cheaper while the bars and rods are protected. Structurals are less so.

Then finishing becomes once again an important business. The continuous casting technologies will have a threat in the cheap billets across the world riding on innovations in the DRI segment.

Conclusion

♦♦ T echnology advances in the induction furnaces seem to be in the right direction. ♦♦ Continuous casting technologies in the induction furnace sector will widen their margins over the integrated mills in the bars and rods segment, but the threat of cheap billets across the world should make us maintain our focus on finishing lines. ♦♦ Continuous casting technologies and the new rolling technologies, which are overwhelmingly thermal, require advances in metallurgy that will need another round of innovations in DRI. ♦♦ The new innovations in DRI are with countries using natural gas. ♦♦ Will scrap refining technologies be more important now? But then scrap is much more expensive than DRI and this will serve as a dampener for investing in scrap technologies. ♦♦ New kind of uses will need standalone finishing lines once more.

Interview

Lime waiting for steel’s turnaround

T

hough lime finds applications in a range of industries, its single largest user world-wide is steel. And, with the market for the latter being depressed for the last few years, the lime industry has been experiencing a sluggish 3-4 percent growth annually in India. Adding to its woes is the fact that the industry is highly unorganised, dominated by bit players. But Sigma Minerals, keeping an eye on future demand, is planning to set up a new modern kiln and hydration plant in the course of the next 2 years at an investment of `40-45 crore and is eyeing more mines, preferably in the Nagaur district of north-western Rajasthan, Surendra Nath Bhargava, Managing Director, Sigma Minerals, told Steel Insights.

Excerpts from an interview.

Tell us a bit about the company, its inception, product portfolio etc?

Sigma Minerals Ltd. was established in 1975. It is the first ISO 9001 and the only 14001 certified company that is into lime manufacturing. Our operations are governed on an integrated set-up of limestone mines, lime kilns, state-of-art plants and wellequipped laboratories.

One key factor that propelled our growth is the most advanced twin shaft lime kiln, based on technology provided by Cimprogetti of Italy. This kiln produces highly reactive and high purity lime and is one of the most significant assets of Sigma.

We offer our services to various industries like steel, sugar, chemicals and fertilisers, paints and pigments, leather, plastic, paper, construction, building elements, flue gas treatment, water treatment and effluent treatment plants, etc.

Our product portfolios includes hydrated

lime, quick lime manufactured from our Cimprogetti kiln, quick lime manufactured from traditional kilns, quick lime powder and limestone.

What is the company’s installed capacity and actual production volumes? Where are your plants and mines located? Are the mines owned/leased?

Sigma has an overall installed capacity of around 1,100 tonnes /day, whereas the actual production ranges between 950-1,050 tonnes/day. We run three manufacturing units, of which unit I is located at Khejarla (KHJ), in Jodhpur district, and units II and III are located at Basni Hari Singh (BHS), again in Jodhpur district. Our limestone mines are located at Bilara and Khimsar (Jodhpur district) and Nagaur (Nagaur district). These mines are on lease from the state government of Rajasthan.

Steel Insights, March 2017

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Interview What is the demand volume for lime in India and if demand is growing, then by how much per annum? Does domestic production meet the entire needs within India? How much is imported per annum?

From which geographical locations?

The current estimated demand for lime in India per annum is 3-4 million tonnes and in these years the growth rate has been very slow, say 3-4 percent. In India, lime is produced in the states of Rajasthan, Andhra Pradesh and Madhya Pradesh. Rajasthan is well known for its high grade lime whereas Andhra Pradesh and Madhya Pradesh produce low grade lime. Around 0.5 to 0.6 million tonnes per annum of quick lime and hydrated lime are imported in the coastal areas from Malaysia, Vietnam, Thailand and the United Arab Emirates (Abu Dhabi and Ras-al-Khaimah).

Which industries mainly use lime? What is the share of the steel industry in this pie?

As per the current scenario, lime is used in almost all industries such as paints and pigments, glass, paper, flue gas, chemicals, leather, steel, roads, sugar, plastics, pharmaceuticals, water treatment, construction and lubricants . These industries use lime as one of the major input materials.

The steel industry has been the leader when it comes to consumption of lime. So much so it is the single largest user of lime worldwide.

What are the challenges and issues bothering the lime industry in India?

The lime industry in India is a highly unorganised one. The cost of production is high which results in increased product prices. More international players are entering the Indian market with competitive pricing.

There are several challenges/issues being faced by lime manufacturers. These include capital expenditure, carbon cost and competitiveness, cost-related to abatement measures, low availability of chemical grade limestone.

Going forward, what sort of enablers and/ or opportunities do you see for the industry in India?

Competition is increasing as the Indian economy is progressing. In view of this, good expansion scope for lime producers can be predicted. The steel industry’s turnaround will be a major demand booster for lime players.

At Sigma, what sort of expansion/growth

plans do you have? What sort of investments would be required for this? How will the funding be raised?

Looking towards the growing demand of our customers, we are planning to put up one more modern kiln and hydration plant in the next 2 years. This will attract an investment of `40-45 crore, part of it would be raised internally and the remaining will be raised through debts.

Are you looking to bid for more mines in future? Which are preferred locations?

Limestone is the only raw material for our products. Hence, sustained supply of this material on a long-term basis can only be possible if we are able to have more mines, preferably in the Nagaur district of northwestern Rajasthan.

Do you export or is the entire volume produced meant for domestic consumption?

Yes, we export our material to various countries but the major portion is used for catering to domestic demands.

Are you looking at any newer mineral exploration, like dolomite etc?

As of now, we are not looking at any newer mineral exploration. We would like to focus all our efforts on exploring newer limestone leases that have good quality, chemical grade limestone reserves suitable for lime manufacturing.

What are lime prices like? How have they behaved in the last one year/six months?

What has been the price trend over the last three years? Reasons why the prices behaved the way they did?

Global as well as domestic markets have shown a subdued sentiment for the last three years. Real estate is not doing satisfactorily, core sectors such as steel and cement are not running to full capacities. For the short term, demonetisation further added fuel to fire. The price trend has been stagnant, not commensurate with higher input costs. But, with revival of the economy with a sustained GDP, things should be better in the near future. 

52 Steel Insights, March 2017

Interview

India on Preiser Scientific radar Please give us an overview of your company.

Preiser Scientific was established in 1924 and is into manufacturing and supplying of scientific instruments, laboratory equipment to the mining industry as well as to areas like medicine, research, government and education. In the United States, we have around 80 percent exposure to the steel industry. We are based in St Albans, West Virginia (WV) with offices located in Louisville, Kentucky and in Beijing, China.

We also have a specialty laboratory products manufacturing facility in Nitro, WV. Preiser Scientific offers a wide variety of balances and scales to meet the needs of the coal laboratory.

What brings you to India?

We do have a large presence in India for over 30 years. However, now, our company wants to expand its sales footprint in India. In order to do that, we need to set up a technical team to support our progress in India. All this while we have done all our work through our Nitro, West Virginia office. Now, we are looking to expand presence through tie-ups and distributorships.

How was your existing set-up in India?

We have a small, one-man agent in Kolkata but a lot of times, the companies would contact us directly and we would deal with them directly through the internet.

What India plans does Preiser Scientific have?

First, we want to expand into areas where

S

t Albans, West Virginia-based Preiser Scientific, Inc, which has been present in India for more than 30 years, is looking to expand its sales footprint in India. The company is into manufacturing and supplying of scientific instruments and laboratory equipment to the mining industry and other sectors. It offers a variety of instruments for the coal and coke laboratories, including coal ashing furnace, coke testing equipment etc. Curtis A. Parish from Preiser Scientific recently visited Kolkata as part of a larger United States trade mission to India. The trade mission included representatives of some mining technology companies from West Virginia. Madhumita Mookerji caught up with Parish for an exclusive interview.

Excerpts. we are not yet present in. Areas that we do not yet know about. This is with regard to sales.

Second is the after-sales service. We want to offer good after sales service. For instance, you buy a car, which subsequently develops a problem and you need to take it back to the car dealer. Suppose, the dealer fixes the problem right away and it doesn’t come back to bother you anymore, I guess you would like to buy another car from the same dealer.

Preiser Scientific would like to offer similar kind of after-sales service. If a customer has a technical problem or even a technical question and can’t get the answer, he would be more reluctant to come to see you again. We want to make sure that our technical presence is also available to our customers on a day-to-day basis because each day our equipment can cost them money by being down. Because they buy and sell coal using our equipment. So it is important that they have immediate technical support.

Going forward, we would look at the power sector but would also look to expand our presence in the steel industry. India has a very big steel industry and sells a lot of metric tons of steel all over the world.

It is third largest steel producer in the world after China. We also have a big market in China too. We sell to Bao Steel and others. Plus, we sell into Taiwan and Indonesia.

We have a big presence in Asia as a whole. We have an office in Beijing and representatives in Indonesia. We don’t really have that kind of representation in India

and that is what I am here to look at – strengthen our presence in this country.

Preiser Scientific has a strong presence in steel…

We are mainly present in the steel and power segments but both these industries use coal! In the steel industry, they turn met coal into coke which is used in separating the iron from the ore. In the power industry, they use thermal coal to turn on the furnaces to generate power.

What is your presence in the steel sector in the US like?

Preiser Scientific has 80 percent exposure to the met coal industry and the balance is in the power industry.

In India, we have a presence mostly in the steel industry.

What is the size of the market in India for your machines?

In the past 30-odd years, we have sold over well over 200 instruments. Because these are very specialised instruments, even 200 would be a very large number.

Coal India is stressing on third party sampling…

Yes, we see very good opportunities there.

We have been in talks with several players across the steel and coal industries.

We have spoken to various Kolkatabased companies regarding distributorship, and many of them have branch offices across the country. That would give us a stronger presence across the country.

Steel Insights, March 2017

53

Logistics

Iron-ore handled by major ports rise threefold in Apr-Jan Steel Insights Bureau

M

ovement of iron ore through the 12 major Indian ports showed a rise of more than three folds in 2016-17. The major ports together handled 38.61 mt of iron ore in April-January period of 2016-17 compared to 14.37 mt handled in the same period last year.

Mormugao Port handled the highest volume of iron ore, at 11.18 mt, in the April-January, 2016-17 period over 2.29 mt, the port had handled in the corresponding period of the last fiscal.

Meanwhile, the major Indian ports handled 535.35 million tons (mt) of total traffic during 2016-17, about 7.5 percent

higher than 499.68 mt recorded during the same period last year, according to data released by the Indian Ports Association (IPA).

Traffic handled at major ports (during April to January, 2017* vis-a-vis April to January, 2016)

(in ‘ 000 tonnes)

Ports

April to January traffic 2017*

2016

% Variation against prev. year traffic

12888

14113

-8.68

KOLKATA Kolkata Dock System Haldia Dock Complex

27679

27478

0.73

TOTAL: KOLKATA

40567

41591

-2.46

PARADIP

72902

61676

18.20

VISAKHAPATNAM

50989

47114

8.22

KAMARAJAR (ENNORE)

24856

25936

-4.16

CHENNAI

42208

41528

1.64

V.O. CHIDAMBARANAR

32163

30862

4.22

COCHIN

20455

18494

10.60

NEW MANGALORE

32408

28528

13.60

MORMUGAO

26065

16094

61.95

MUMBAI

52945

51405

3.00

JNPT

51323

53546

-4.15

KANDLA

88470

82912

6.70

TOTAL

535351

499686

7.14

(*) Tentative

54 Steel Insights, March 2017

Thermal coal handling by the major ports was down 9.62 percent in April-January of the current fiscal. Movement of thermal coal through these ports decreased to 78.40 mt in this period, compared to 86.74 mt achieved in the same period last year.

The major ports handled a total of 39.5 mt of coking coal in April-January, down 2.61 percent compared to 40.60 mt in the same period last year.

Among the major ports, Kolkata Port had the distinction of handling the highest volume of thermal coal, at around 9.93 mt, in April-January, 2017. The Port had handled 12.42 mt during the same period of last fiscal.

Movement of container traffic in terms of tonnage rose 1.03 percent to 102.79 mt in first 10 months of 2016-17 compared to 101.74 mt in the same period last fiscal.

Altogether, nine major ports showed positive growth in traffic handling in April-January, 2017 while the remaining three showed negative growth on a year-on-year basis.

In terms of growth, Marmagao Port topped the list with 61.95 percent increase in cargo throughput. Chennai Port’s growth was the lowest, at about 1.64 percent, during the period. In terms of traffic volumes, Kandla Port clinched the top rank with crude oil volumes of 49.95 mt recorded for the period.

Logistics

Indian Railways’ Jan iron-ore handling up 20% y-o-y Ritwik Sinha

I

ndian Railways transported 12.56 mt of iron ore for exports, steel plants and for other domestic use in January 2017, up 20 percent from 10.47 mt in January 2016.

Revenue earnings of Railways from transportation of iron ore for exports, steel plants and for other domestic use were up 27.5 percent to `801.51 crore in January 2017, compared to `628.30 crore in the corresponding month of last year.

Iron ore for exports, steel plants and for other domestic use, transported through

railways during the first 10 months (AprilJanuary) of FY17 stood at 113.06 mt, up 17.34 percent compared to 96.35 mt in the same period in FY16. Revenue earnings of `6858.57 crore from transportation of iron

Commodity-wise revenue earnings of Railways Commodity Coal i) For steel plants ii) For washeries iii) For thermal power houses iv) For public use Total Raw material for steel plants except iron ore Pig iron and finished steel i) From steel plants ii) From other points iii) Total Iron ore i) For export ii) For steel plants iii) For other domestic use iv) Total Cement Foodgrains Fertilizer Mineral oil (POL) Container service i) Domestic container ii) EXIM container iii) Total Balance other goods Total revenue earning traffic

Quantity Jan-16 Jan-17 Apr-Jan-16 Apr-Jan-17 Jan-16

Earnings (` crore) Jan-17 Apr-Jan-16 Apr-Jan-17

4.32 0.12

4.06 0.13

44.34 .87

39.81 1.02

339.29 3.15

325.28 11.89

3525.13 22.50

2963.87 51.07

33.55

30.18

309.23

280.67

3040.53 2919.93

28692.05

25543.13

11.01 49

13.07 47.44

103.82 458.26

116.47 437.97

950.66 1037.03 4333.63 4294.13

9553.88 41793.56

8918.49 37476.56

1.67

1.84

16.93

17.34

153.85

179.49

1703.64

1545.95

2.72 1.08 3.8

2.89 1.50 4.39

23.80 10.66 34.46

27.53 11.55 39.08

531.58 132.20 663.78

499.99 157.02 657.01

4446.50 1190.21 5636.71

4679.20 1130.79 5809.99

0.48 6.66

0.63 7.27

1.58 65.49

5.99 66.44

66.30 349.07

53.56 390.10

221.06 3546.60

499.95 3440.52

3.33

4.66

29.28

40.63

212.93

357.85

2054.47

2918.10

10.47 9.50 4.74 4.53 3.77

12.56 9.42 4.35 3.68 3.63

96.35 87.62 37.66 45.26 36.52

113.06 82.98 36.56 42.61 35.72

628.30 825.25 818.91 632.29 518.68

801.51 806.73 765.83 446.77 488.42

5822.13 7529.84 6360.22 6029.41 4971.15

6858.57 6912.39 6308.99 5178.07 4804.07

.75 3.17 3.92 6.70

.95 3.17 4.12 6.99

7.47 31.14 38.61 63.13

7.74 31.37 39.11 64.19

104.50 362.67 467.17 679.92

125.72 313.49 439.21 692.88

1026.67 3541.96 4568.63 6277.53

1072.54 3237.51 4310.05 6078.13

98.09

98.42

914.80

908.62

9721.78 9571.98

90692.82

85282.77

ore for exports, steel plants and for other domestic use during the first 10 months of FY17 were up 17.8 percent from `5822.13 crore earned in same period of FY16.

Meanwhile, Railways transported 47.44 million tons (mt) of coal in January 2017, down 3.18 percent from 49 mt of coal handled in January 2016, according to information available with Steel Insights.

Revenue earnings of Railways from transportation of coal were also marginally down to `4294.13 crore in January 2017 from `4333.63 crore in January 2016.

Indian Railways transported 437.97 mt of coal during the first 10 months (AprilJanuary) of 2016-17 (FY17), down 4.42 percent compared to 458.26 mt in the same period of FY16, while revenue earnings of `37476.56 crore from transportation of coal during the first 10 months of FY17 were down 10.33 percent from `41793.56 crore earned in the same period of FY16.

Cement transported through railways stood at 9.42 mt in January 2017, marginally down from 9.50 mt in January 2016. Revenue earnings of Railways from transportation of cement were up 15.94 percent to `756.86 crore in October 2016 from `652.83 crore in September 2016.

Railways transported 82.98 mt of cement during the first 10 months (April-January) of FY17, down 5.29 percent compared to 87.62 mt in the same period in FY16.

Revenue earnings of `6912.39 crore from transportation of cement during the first 10 months of FY17 were down 8.2 percent from `7529.84 crore earned in same period of FY16. 

Steel Insights, March 2017

55

PRICE DATA

Prices of Steel products in various markets Steel Insights Bureau Rs. per ton

NAME OF THE MARKET / SPECIFICATION

PRODUCT

Price Rs./Ton as on

Price Rs./Ton as on

Price Rs./Ton as on

Price Rs./Ton as on

Price Rs./Ton as on

Monthly changes

2-Mar-17

1-Mar-17

22-Feb-17

31-Jan-17

3-Sep-16

INGOT

MANDI GOVINDGARH

27,650

27,800

27,600

26,600

23,100

▲

INGOT

ALANG

26,300

-

25,900

24,300

21,000

▲

INGOT

MUMBAI

27,100

27,200

26,300

25,500

22,100

▲

SCRAP

MANDI GOBINDGARH

19,700

19,800

19,800

17,600

17,250

▼

SCRAP

KOLKATA

-

-

-

-

-

SCRAP

MUMBAI

-

-

17,000

-

15,800

MELTING SCRAP

MANDI GOBINDGARH

21,700

-

-

19,900

19,300

⇔

CAST IRON

MANDI GOVINDGARH - TOKA

23,600

23,600

23,800

23,300

21,400

▼

CAST IRON

LUDHIANA

25,000

25,000

25,000

25,500

21,300

PATRA

MANDI GOVINDGARH

31,000

31,000

31,200

29,850

26,300

G PIPE

MANDI GOVINDGARH

33,700

34,000

33,500

32,600

27,600

⇔

T. IRON

MANDI GOVINDGARH

34,300

34,400

34,100

33,300

29,800

ANGLE

MANDI GOBINDGARH

30,100

30,400

29,800

29,200

25,500

▲

ROUND

MANDI GOVINDGARH

30,600

30,800

30,600

29,600

26,100

GIRDER

MANDI GOVINDGARH

32,700

32,800

32,200

32,100

27,900

MILL PIPE

MANDI GOVINDGARH

30,300

30,700

30,400

29,600

25,400

⇔

BILLET

MANDI GOBINDGARH

28,000

28,300

28,100

26,900

23,400

▼

BILLET

DURGAPUR

24,800

24,900

-

23,000

24,200

▲

SPONGE IRON

MANDI GOVINDGARH

18,900

18,900

-

18,000

15,300

▲

SPONGE IRON

DURGAPUR

16,300

16,300

16,000

13,750

13,050

▲

PIG IRON

BATALA

29,600

31,000

29,000

30,200

26,000

▲

PIG IRON

JALANDHAR

30,600

31,800

29,000

29,800

25,000

▲

TMT 28 mm

GOA

-

-

-

-

24,500

TMT 28 mm

HYDERABAD

-

-

-

-

23,000

TMT 20 mm

MUMBAI

30,800

-

30,300

-

25,450

⇔

TMT 20 mm

MORIA

-

-

-

-

29,000

TMT 16 mm

DURGAPUR

-

-

-

-

22,200

TMT 12 mm

DOABA

39,800

40,000

39,400

38,700

34,000

TMT 12 mm

GYAN

39,700

40,000

39,500

38,500

34,100

HR COILS

DELHI

36,400

36,400

36,400

38,300

30,700

HR COILS

KOLKATA

36,600

36,600

37,000

38,200

30,700

CR COILS

MUMBAI

41,200

41,200

41,600

42,900

35,000

NMDC

6-20mm / 65

2,425

2,425

2,325

2,225

1,700

▲

NMDC

10-150mm / 64

2,195

2,195

2,100

2,015

1,530

▲

NMDC

FINES / 64

2,185

2,185

2,085

1,985

1,460

▲

BELLARY

5mm-18mm

6,100

6,000

5,600

5,700

4,400

▲

TATANAGAR

5mm-18mm

4,900

4,800

4,200

4,200

3,500

▲

BARBIL

5-20mm

4,600

4,600

4,500

4,500

3,400

▲

CHANNEL

GHAZIABAD

34,300

34,000

33,000

32,500

27,600

▲

CHANNEL

RAIPUR

29,600

30,100

29,100

28,200

24,000

▲

WIRE ROD

DURGAPUR

28,300

28,600

27,900

27,100

23,200

▲

WIRE ROD

RAIPUR

30,400

30,600

29,900

28,400

25,400

▲

Note: Prices are basic, exclusive of taxes

Iron ore prices are FOR, excluding Royalty, DMF, NMET, Cess, Forest Permit Fee etc.

HR Coil & CR Coil prices are exclusive of ED & taxes

56 Steel Insights, March 2017

▼

▲

▼

▲

▲

▲

▼

⇔ ▲

⇔

⇔ ▲

▲

⇔ ▼

▼

Ferro Alloy Data

Ferro alloys & metals price trends Steel Insights Bureau Ferro Alloys

Feb-17

Jan-17

Dec-16

Ex-works Rs/ ton Ferro Silicon (Si - 70%)

64,800

62,400

62,100

HC Ferro Chrome (Cr - 60%)

90,800

96,800

109,800

HC Ferro Manganese (Mn - 70%)

70,500

83,200

82,200

Silico Manganese (Mn - 60%, Si - 14%)

55,400

60,100

63,200

Ferro Titanium (Ti - 30%)

12,250

12,250

12,250

Ex-works Rs/ kg Ferro Vanadium (V - 50%)

660

655

583

Ferro Moly (Mo - 60% min)

635

620

568

Base metals price trends Steel Insights Bureau Non Ferrous Metals

Feb-17

Jan-17

Dec-16

122,350

115,150

403,050

376,750

Ex-works Rs/ ton Aluminium

126,600 Ex-works/Ex-Godown Rs/ ton

Copper

397,400 USD/Ton

Lead

1,516

1,591

1,358

Zinc

1,880

1,910

1,728

Tin

19,755

19,975

21,100

Nickel

7,328

6,735

6,901

Steel Insights, March 2017

57

PRODUCTION DATA

Production, imports, exports, availability & apparent consumption (provisional) April-January 2017 Steel Insights Bureau (in ‘000 tons)

FINISHED STEEL Non-Alloy Steel (Carbon)

PRODUCERS

2016 - 17 (Prov.)

2015 - 16 (Final)

Alloy Steel

% Variation

SAIL

9411

8017

17.4

RINL

2553

2264

TSL

9087

ESSAR

2016 - 17 (Prov.)

2015 - 16 (Final)

% Variation

% Variation 16.8

12.8

2553

2264

12.8

7850

15.8

9087

7850

15.8

6290

5065

24.2

6290

5065

24.2

JSWL

16906

13781

22.7

345

301

14.6

17251

14082

22.5

JSPL

2013

1911

5.3

159

126

26.2

2172

2037

6.6

OTHERS

37455

38693

-3.2

7031

6392

10.0

44486

45085

-1.3

Gross Production

83715

77581

7.9

7667

6975

9.9

91382

84556

8.1

8348

9697

-13.9

26

19

36.8

8374

9716

-13.8

75367

67884

11.0

7641

6956

9.8

83008

74840

10.9

d) Imports

4470

7311

-38.9

1630

2494

-34.6

6100

9805

-37.8

e) Exports

5387

2914

84.9

479

513

-6.6

5866

3427

71.2

74450

72281

3.0

8792

8937

-1.6

83242

81218

2.5

738

1158

44

169

782

1327

g) Apparent Consumption (e-f)

73712

71123

8748

8768

82460

79891

Less : Double Counting

10917

11088

2648

2213

13565

13301

Consumption

62795

60035

6100

6555

68895

66590

e) Availability (c+d-e) f) Variation in Stock

Source: Steel Ministry

58 Steel Insights, March 2017

3.6

4.6

-15.4

2015 - 16 (Final) 8173

c) Total Production for Sale

156

2016 - 17 (Prov.)

9543

Less : IPT/Own Consumption

132

Total

-0.2

-6.9

3.2

3.5

PRODUCTION DATA

Sponge iron production for January 2017 Steel Insights Bureau (In ‘000 tonnes) JANUARY Producers

2016 - 17 (Prov.)

2015 - 16 (Final)

JANUARY Vis - A - Vis DECEMBER

APRIL - JANUARY

% Variation

JANUARY 2017 (Prov.)

DECEMBER 2016 (Prov.)

% Variation

2016 - 17 (Prov.)

2015 - 16 (Final)

% Variation

A ESSAR

313

125

150.4

313

346

-9.5

2579

815

216.4

B JSWL

182

151

20.5

182

231

-21.2

1891

1474

28.3

C JSPL

187

161

16.1

187

144

29.9

1479

1622

-8.8

D OTHERS

1392

1313

6.0

1,392

1411

-1.3

14397

14758

-2.4

GROSS PRODUCTION

2074

1750

18.5

2074

2132

-2.7

20346

18669

9.0

830

684

21.3

830

881

-5.8

7956

6178

28.8

1244

1066

16.7

1244

1251

-0.6

12390

12491

-0.8

Less : IPT / Own Consumption Total Production for Sale Source: Steel Ministry

Pig iron production for January 2017 Steel Insights Bureau JANUARY Producers

2016 - 17 (Prov.)

(in ‘000 tons)

JANUARY Vis - A - Vis DECEMBER

2015 - 16 (Final)

% Variation

JANUARY 2017 (Prov.)

DECEMBER 2016 (Prov.)

0

0

APRIL - JANUARY

% Variation

2016 - 17 (Prov.)

2015 - 16 (Final)

% Variation

A SAIL a. Bhilai Steel Plant

0

0

b. Durgapur Steel Plant

7

2

250.0

7

11

c. Rourkela Steel Plant

4

6

-33.3

4

10

d. Bokaro Stel Plant e. Indian Iron & Steel Plant f. Alloy Steel Plant

0

0

-36.4

90

37

143.2

-60.0

45

117

-61.5

4

1

300.0

4

9

25

35

-28.6

14

26

-46.2

14

12

16.7

212

316

0

0

0

0

0

0

-32.9

g. SSP

0

0

0

0

0

0

h. Vis. Iron & Steel

0

1

0

0

2

7

-71.4

Total SAIL

29

36

-19.4

29

42

-31.0

374

512

-27.0

B RINL (VSP)

23

13

76.9

23

7

228.6

128

98

30.6

C TSL

0

0

0

0

0

0

D ESSAR

0

0

0

0

0

0

E JSWL

9

1

800.0

9

9

0.0

178

107

66.4

6

18

-66.7

6

2

200.0

62

229

-72.9

G OTHERS

F JSPL

762

747

2.0

762

759

0.4

7591

7541

0.7

GROSS PRODUCTION

829

815

1.7

829

819

1.2

8333

8487

-1.8

46

138

-66.7

46

48

-4.2

479

706

-32.2

783

677

15.7

783

771

1.6

7854

7781

0.9

Less : IPT / Own Consumption Total Production for Sale Source: Steel Ministry

Steel Insights, March 2017

59

PRODUCTION DATA

World & Indian Steel Production Data Steel Insights Bureau World crude steel production per region, Dec’16 vs Jan’17

World crude steel production per region, cumulative 2017 vs 2016

100,000

300,000

80,000

240,000

60,000

180,000

40,000

120,000

20,000

60,000 0

0 Dec-16 European Union (28) North America Middle East

Nov - Jan'2017

Jan-17 Other Europe South America Asia

C.I.S. (6) Africa Oceania

Nov - Jan'2016

European Union (28)

Other Europe

C.I.S. (6)

North America

South America

Africa

Middle East

Asia

Oceania

Crude Steel Production

Finished Steel for Sale (Non - Alloy & Alloy)

Non - Flat Production for Sale (Non - Alloy & Alloy

Flat Production for Sale (Non - Alloy & Alloy)

60 Steel Insights, March 2017

Consumption DATA

Import, Export, Availability, Stock & Consumption of Iron & Steel Apr 2016-Jan 2017 (2016-17) (Provisional) Steel Insights Bureau Quantity ‘000 tonnes

Apparent Consumption

Stock CATAEGORY

Total Current Production Imports Exports Availability As on As on Variation Year For Sale 01-APR- 31-JANin (20162016 2017 Stock 17)

A. PIG IRON

Double Count

Last Year (2015 16)

Current Year (201617)

Consumption

Last Year (2015 16)

Current Year (201617)

Last Year (2015 16)

Consumption Variation Over Last Year(%)

7,855

32

201

7,686

142

176

34

7,652

7,572

7,652

7,572

1.1

B. SPONGE IRON (DRI)

12,390

1

117

12,274

480

430

-50

12,324

12,084

12,324

12,084

2.0

C. SEMIS (for Sale)

32,200

561

902

31,859

561

618

57

31,802

30,839

31,802

30,839

3.1

1. Bars & Rods

28,800

352

492

28,660

2,612

3,062

450

28,210

26,607

28,210

26,607

6.0

6,492

56

109

6,439

286

334

48

6,391

6,205

6,391

6,205

3.0

3. Rly. Materials

829

39

50

818

76

64

-12

830

767

830

767

8.2

Total Non - Flat (1 to 3)

36,121

447

651

35,917

2,974

3,460

486

35,431

33,579

35,431

33,579

5.5

3,694

585

218

4,061

345

392

47

4,014

3,835

4,014

3,835

4.7

5. H.R.Coils \ Skelp

19,634

1,626

1,652

19,608

1,313

1,438

125

19,483

18,292

11,619

10,489

10.8

6. H.R.Sheets

904

1,291

-30.0

3,224

3,151

2.3

FINISHED STEEL (NON - ALLOY)

2. Structurals

4. Plates

941

33

66

908

175

179

4

904

1,291

7. C.R.Sheets \ Coils

6,732

749

1,085

6,396

174

293

119

6,277

6,435

8. GP \ GC Sheets

0

7,864

3,053

0

7,803

3,284

6,079

456

1,428

5,107

504

457

-47

5,154

5,116

5,154

5,116

0.7

9. Elec. Sheets

172

251

34

389

11

12

1

388

378

388

378

2.6

10. Tinplate (incl. ww)

290

213

37

466

0

0

0

466

372

466

372

25.3

0

1

0

1

1

1

0

1

4

1

4

-75.0

1,705

85

214

1,576

25

28

3

1,573

1,741

1,573

1,741

-9.6

0

24

2

22

0

0

0

22

79

22

79

-72.2

Total Flat (4 to 13)

39,247

4,023

4,736

38,534

2,548

2,800

252

38,282

37,543

10,917

11,087

27,365

26,456

3.4

TOTAL (Non - Alloy)

75,367

4,470

5,387

74,450

5,522

6,260

738

73,712

71,122

10,917

11,087

62,795

60,035

4.6

11. TMBP 12. Pipes (Large Dia.) 13. Tin free steel

FINISHED STEEL (ALLOY) 14. Non-Flat

5,120

428

134

5,414

166

184

18

5,396

5,314

5,396

5,314

1.5

15. Flat

2,521

1,202

345

3,378

63

89

26

3,352

3,452

2,648

2,212

704

1,240

-43.2

Total (Alloy)

7,641

1,630

479

8,792

229

273

44

8,748

8,766

2,648

2,212

6,100

6,554

-6.9

83,008

6,100

5,866

83,242

5,751

6,533

782

82,460

79,888

13,565

13,299

68,895

66,589

3.5

GRAND TOTAL Source: Steel Ministry

Steel Insights, March 2017

61

ImPORT DATA

Import of Iron & Steel through major Indian ports April-January’17 vis-a-vis April-January’16 Steel Insights Bureau Quantity ‘000 tonnes

Non-Alloy (Prime + Defective)

Non-Alloy (Prime + Defective)

Growth

Apr-Jan 17(P)

Apr-Jan 16

%

......Billets,Slabs,etc.

272.86

397.76

-31.4

.......Re-rollable Scrap

282.23

367.68

-23.24

BARS & RODS

351.66

536.12

-34.41

STRUCTURALS

56.34

19.5

188.95

Sl. No. I

Category Steel A.SEMIS

B. Finished Steel 1. Non- Flat Products

RLY. MATERIALS

38.51

9.26

315.93

TOTAL (1) Non-Flat Products

446.51

564.88

-20.95

2. Flat Products PLATES

585.34

830.4

-29.51

HR SHEETS

32.65

104.64

-68.81

HR COIL/STRIP

1625.76

2932.09

-44.55

CR COIL/SHEETS

748.73

1798.36

-58.37

GP/GC SHEETS/COIL

455.65

501.03

-9.06

ELECT. SHEETS

250.9

275.2

-8.83

1

3.22

-69.12

TIN PLATES

212.87

145.4

46.41

TIN FREE STEEL

23.91

71.8

-66.71

PIPES

84.88

83.79

1.3

TOTAL (2) Flat Products

4021.69

6745.93

-40.38

TOTAL Finished Steel(1+2)(NON-ALLOY)

4468.2

7310.81

-38.88

TOTAL Steel=(A+B)(NON-ALLOY)

5023.29

8076.25

-37.8

1630.83

2494.1

-34.61

5.93

38.3

-84.52

TOTAL STEEL(ALLOY)

1636.76

2532.4

-35.37

TOTAL FINISHED STEEL(ALLOY + NON-ALLOY)

6099.03

9804.91

-37.8

TOTAL STEEL(ALLOY + NON-ALLOY)

6660.05

10608.65

-37.22

TMBP

Alloy/Stainless Finished Steel Semis

II

III

Other Steel Items FITTINGS

414.71

402.43

3.05

MISC. STEEL iTEMS

1136.86

1655.88

-31.34

SCRAP

4554.31

5410.32

-15.82

PIG IRON

31.56

19.3

31.98

SPONGE IRON

1.28

0.2

534.6

0

0.78

-100

518.31

200.22

158.87

13317.08

18297.78

-27.22

Iron

H.B. IRON IV

Ferro-Alloys GRAND TOTAL

Source: Steel Ministry

62 Steel Insights, March 2017

Import-Export DATA

Iron ore & ferro alloy import-export trend Steel Insights Bureau Iron ore pellets import price trend

Iron ore lumps import price trend 320,000 MTS

₹ 9,000

₹ 6,750

₹ 8,100

₹ 6,000

256,000 MTS

₹ 7,200

112,000 MTS

₹ 7,500

₹ 5,250

₹ 6,300

₹ 3,600

56,000 MTS

₹ 2,700

Qty

₹ 3,000 ₹ 2,250 ₹ 1,500

64,000 MTS

₹ 1,800

28,000 MTS

₹ 3,750 128,000 MTS

₹ 750

₹ 900

800,000 MTS

₹ 2,400

640,000 MTS

₹ 1,800

480,000 MTS

₹ 600

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Jul-16

Aug-16

Jun-16

320,000 MTS

₹ 4,000

160,000 MTS

₹ 2,000

Sum of Quantity

Average of UNIT PRICE

Ferro alloy import price trend

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

Apr-16

May-16

Feb-16

Mar-16

₹0 Dec-15

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Jul-16

Aug-16

Jun-16

Apr-16

May-16

Mar-16

₹ 8,000

0 MTS

₹0

0 MTS

₹ 10,000

Jan-16

450,000 MTS

₹ 12,000

₹ 6,000 Qty

Qty

₹ 1,200

Unit Price

₹ 3,000

900,000 MTS

Jan-16

Average of UNIT PRICE

Iron ore pellets export price trend

1,350,000 MTS

Feb-16

Apr-16

Sum of QUANTITY

1,800,000 MTS

Sum of Quantity

May-16

Feb-16

Average of UNIT PRICE

Iron ore fines export price trend

Dec-15

Mar-16

Jan-17

Dec-16

Oct-16

Nov-16

Sep-16

Aug-16

Jul-16

Jun-16

Apr-16

May-16

Mar-16

Feb-16

Sum of QUANTITY

₹0

0 MTS

₹0

0 MTS

Unit Price

Qty

₹ 4,500

Unit Price

₹ 5,400

84,000 MTS

₹ 4,500

192,000 MTS

Unit Price

140,000 MTS

Average of UNIT PRICE

Ferro alloy export price trend ₹ 125,000

₹ 195,000

₹ 116,000 ₹ 107,000

₹ 165,000

₹ 98,000 ₹ 89,000

₹ 135,000

₹ 80,000 ₹ 71,000 ₹ 62,000

₹ 105,000

₹ 53,000 ₹ 44,000

₹ 75,000

FERRO CHROME

FERRO MANGANESE

FERRO SILICON

FERRO CHROME

FERRO MANGANESE

FERRO SILICON

SILICO MANGANESE

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Jan-17

Dec-16

Nov-16

Oct-16

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

₹ 45,000

Feb-16

₹ 35,000

FERRO SILICO MANGANESE

*For details break-up, subscribe India Steel Market Watch (ISMW)

Steel Insights, March 2017

63

EXPORT DATA

Export of Iron & Steel through major Indian ports April-January’17 vis-à-vis April-January’16 Steel Insights Bureau Quantity ‘000 tonnes

Non-Alloy (Prime + Defective)

Non-Alloy (Prime + Defective)

Growth

Apr-Jan 17(P)

Apr-Jan 16

%

......Billets,Slabs,etc.

895.35

446.09

100.71

.......Re-rollable Scrap

0.05

0.11

-56.42

BARS & RODS

491.63

295.75

66.23

STRUCTURALS

109.04

64.83

68.17

Sl.No I

Category Steel A.SEMIS

B. Finished Steel 1. Non- Flat Products

RLY. MATERIALS

50.15

1.73

2795.19

TOTAL (1) Non-Flat Products

650.82

362.31

79.63

PLATES

218.3

260.88

-16.32

HR SHEETS

65.55

55.05

19.07

HR COIL/STRIP

1651.95

336.88

390.36

CR COIL/SHEETS

1084.79

532.8

103.6

GP/GC SHEETS/COIL

1428.35

1175.33

21.53 105.51

2. Flat Products

ELECT. SHEETS

34.03

16.56

TIN PLATES

37.02

51.32

-27.86

TIN FREE STEEL

1.71

0.67

155.33

PIPES

214.04

122.63

74.54

TOTAL (2) Flat Products

4735.74

2552.12

85.56

TOTAL Finished Steel(1+2)(NON-ALLOY)

5386.56

2914.43

84.82

TOTAL Steel=(A+B)(NON-ALLOY)

6281.96

3360.63

86.93

478.41

513.38

-6.81

6.15

2.96

108

TOTAL STEEL(ALLOY)

484.56

516.34

-6.15

TOTAL FINISHED STEEL(ALLOY + NON-ALLOY)

5864.97

3427.81

71.1

TOTAL STEEL(ALLOY + NON-ALLOY)

6766.52

3876.97

74.53

64.79

Alloy/Stainless Finished Steel Semis

Other Steel Items II

Other Steel Items FITTINGS

683.32

414.67

MISC. STEEL iTEMS

1152.14

1111.56

3.65

2.6

1.95

33.21

PIG IRON

201.33

295.54

-31.88

SPONGE IRON

116.91

91.57

27.67

H.B. IRON

0.27

0

Ferro-Alloys

1324.47

1100.2

20.38

GRAND TOTAL

10247.56

6892.46

48.68

SCRAP III

IV

Iron

Source: Steel Ministry

64 Steel Insights, March 2017

66 Steel Insights, March 2017

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