Excerpts of speech delivered at a conference by Wim Van Gerven, COO, AM/NS India.
green steel
blending.
Unit to produce 0.75 mtpa Tiscon-branded long steel products at Ludhiana.
43
28 Indian Railways’ coal handling up 20% till July
by providing a level playing
29 Global cr ude steel output down 5.57% in July m-o-m
15 Imported scrap offers rise
19 Global headwinds to impact prices in FY23 remainder : ICRA
14 AM/NS to acquire strategic infra assets from Essar
24 Seabor ne coking coal offers rise in August August sales nor thbound ahead of festivities Domestic iron ore offers remain range-bound
17 India’s July sponge iron production up 13%
27 Iron ore handled by major por ts down 34% till July
10 | COVER STORY of is possible field.”
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45
Posco partners with Greenko on green hydrogen
6 | COVER STORY
automotive”
Interview of Alain Legrix de La Salle, Director and VP, Sales and Marketing at AM/NS India and VP at ArcelorMittal.
Tata Steel to set up scrap-based EAF steel plant in Punjab
“Increase
supply
16 India pig iron production up 1.6% y-o-y in July
shredding facility 47 Corporate Update 49 Gover nment update 51 Impor t Export data 55 Price trends 56 Ferro Alloy data 57 Production data 59 Consumption data 60 Impor t data 61 Expor t data
21 | FEATURE
36 | CORPORATE
25
34 JFE, Emirates Steel, Itochu eye green steel chain SAIL sees steel for tunes reviving NMDC eyes 46 mt ore production in FY23 JSW ties up with Kiwi firm for scrap
32 Fortescue realisation down 26% on lower iron ore prices
To achieve carbon neutrality in 2050 by replacing BF with HyREX.
“AM/NS India set to expand steel solutions to
18 India July cr ude steel production up 3.2% y-o-y
30 | INTERNATIONAL
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A detailed look at plans to attract investment in coking coal mining and
Focus on coking coal in reforms 2.0
4 Steel Insights, September 2022 CONTENTS
Legrix de La Salle is Director and Vice President, Sales and Marketing at AM/NS India and Vice President at ArcelorMittal. Salle, a graduate of the ‘Ecole Supérieure de Gestion’ in Paris, joined ArcelorMittal in 1985 and has held various leadership roles across the group and in a range of key divisions, including ArcelorMittal’s automotive business, international sales and distribution. In his most recent role prior to joining AM/NS India, he was appointed Head of Business Transformation at ArcelorMittal Europe flat products. He spoke to Steel Insights about AM/NS India’s strategy for automotive steel and new product offerings and production lines being created for this.
COVER STORY
Alain
6 Steel Insights, September 2022
“AM/NS India set to expand steel solutions to automotive market”
The auto contracts were closed recently. What is the current scenario like in terms of automotive steel demand and offtake at AM/NS India as well as the industry? Was there a lull in demand in the precontact closure period?
Automotive steel demand comprises around 10 percent of total steel demand. However, going forward, it is heard that the tonnage will decrease although specifications will remain the same. Auto companies are also taking technological strides to make their vehicles lighter. Is this a challenge for steelmakers, the fact that tonnage will decrease?
At the Kendrapara facility in Odisha, we will make upstream flat steel products for automotive applications, but the finishing will be predominantly done at our plants located in western India.
What is the share of automotive steel at AM/NS India? What plans are afoot to increase this share going forward?
ArcelorMittal Nippon Steel India (AM/ NS India) has a diversified product offering, coupled with its wide distribution network and Research and Development (R&D) centre, enabling it to maintain strong relationships with customers, including automobileAM/NSmanufacturers.Indiahasgained a significant market share in commercial vehicles, auto components like wheels, and pressed parts, etc. We are still developing our offerings in the passenger vehicles segment, and this will be further developed once we will have our new production lines for Cold Rolled via continuous annealing and coated steel solutions.Theprocess to offer these products has started and we are leveraging the expertise and experience of our parent companies –ArcelorMittal and Nippon Steel – to bring more innovative and globally benchmarked automotive steel to our customers in India.
We have a clear, long-term strategy and a framework to expand our market share in auto segment.
We foresee three trends, going forward. Firstly, we think the steel intensity per vehicle (steel content per vehicle) will decrease by 4-5 percent by 2030, due to new regulations in safety protocols and emission control.However, in the passenger vehicle segment we may see a shift towards utility vehicles from small cars. A small car uses on average 500 kg per vehicle whereas a utility vehicle uses 950 kg.
Thirdly, in addition to the incremental growth brought about by the expansion of the auto market, we will also see a shift in the usage of the type of steel. Cold rolled and drawing qualities will be substituted by high-strength steel and new coated steel solutions.
Our OEM customers are announcing strong figures in terms of production forecast till the end of this calendar year. We are, therefore, expecting a positive trend. Structurally, demand in India is on an uptick. Demand for automobiles is still strong and the lead time to get a car is long
We are investing heavily to be able to provide these new steels to the market. It not only requires new dedicated production lines but also an upstream footprint to be able to produce high-quality steel. Consistency and reliability are key levers for this business. We are investing heavily in Hazira plant, Gujarat, to ensure that our industrial footprint expands, supported by the state-of-the-art automotive finishing lines.We are leveraging the experience of ArcelorMittal and Nippon Steel who have been investing in the automotive segment for several years. This will result in specialised products for Indian customers. We are aware of market challenges being
You will have a new 12-mtpa plant coming up in Kendrapara in Odisha. What sort of automotive steel production plans are there at this plant? What will be the investment like?
Steel Insights, September 2022 7
Our efforts in the auto segment will be driven from our flagship plant in Hazira, Gujarat and the specialised lines for this business will be based in this location. Our intent is to make Hazira the primary specialised hub for auto products based on the specialties from ArcelorMittal and Nippon Steel.
faced by customers, and our automotive steel solutions will address these issues.
COVER STORY
How do steelmakers propose to tackle the above scenario when it comes upon them?
“AM/NS India has gained a significant market share in commercial vehicles, auto components and pressed parts, etc. We are still developing our offerings in the passenger vehicles segment, and this will be further developed once we have our new production lines for Cold Rolled via continuous annealing and coated steel solutions.”
Focus on coking coal in reforms 2.0
“Country’s attention over the past 10-15 years, particularly after the Supreme Court verdict in 2014, was entirely concentrated on thermal coal. The country was so besotted by thermal coal requirement for the power sector that a lot of high GCV coal, which could have gone to the secondary steel sector, has also been allocated to the power sector. Now we need to focus on coking coal,” A K Jain,
“Country’s attention over the past 10-15 years, particularly after the Supreme Court verdict in 2014, was entirely concentrated on thermal coal. The country was so besotted by
Opening
“The steel sector’s need for coking coal from domestic sources requires a complete end-to-end solution and we welcome your
The key objective of this workshop was to gauge the interest and capability of the steel sector and mine developers to bid in
Exploration of whatever coking coal reserves that we have has not happened in a significant way while washery capacity hasn’t gone up either.
Steel Insights, September 2022 21 FEATURE
To bridge this anomaly, and reduce costly imports of coking coal, the government has now decided to focus on coking coal mining and its domestic availability during the next round of coal sector reforms.
coking coal block auctions and open mines integrated with washeries based on the demand-supply gap of coking coal to reduce import of coking coal.
Secretary, Coal Imports of coking & thermal coal during the last six years (in million tons) Coal 2017-182018-192019-202020-212021-22 (Prov.)*2022-23 (Prov.)* Coking Coal47.0051.8451.8351.2057.16 9.88 Non-Coking Coal161.25183.51196.70164.05151.77 30.05 Total Import208.24234.35248.53215.25208.93 39.93 Coke 4.594.932.882.462.48 0.44 * Import upto May, 2022 (Source:-DGCI&S and CBIS’s website)
Sumit Maitra
partnership. The ministry is now geared for the next generation reforms moving from thermal coal to coking coal,” A K Jain, Coal Secretary, said while addressing a workshop on coking coal organised by the Coal Ministry along with Coal India.
India needs aggressive focus on increasing coking coal production to reduce import dependency, Pralhad Joshi, Minister of Coal and Mines, said in the workshop while inviting suggestions from all stakeholders for finding technology solution and using available coking coal in the country.
up of the coal sector and introduction of commercial mining have brought in significant investment into thermal coal mining which will ensure adequate availability of fuel as the country’s electricity demand continues to see handsome growth rate year after year. The country also houses the world’s second-largest steel-making capacity, which, unfortunately, continues to rely heavily on imports.
Posco partners with Greenko on green hydrogen
“Cooperation across industrial sectors such as raw materials, engineering, and hydrogen is important mainly for steel companies for the development of ecofriendly hydrogen reduction steelmaking technology. I hope to see creative and successful technology development based on the technologies of both companies,” Ki-soo Kim, Head of Posco’s Low-Carbon Process R&D Center said.
wealth fund GIC, operates 7.5 GW of renewable energy facilities in India.
POSCO starts design of HyREX demo plant
Global
In April, Greenko Group and Belgium’s
Under the MoU signed at Seoul, Posco Holdings and Greenko will carry
“We are excited to be partnering with Posco, this pioneering partnership will propel the transformation of India from a carbon-based fossil energy importer to an exporter of Renewable Energy derived products like Green Hydrogen, Green Ammonia and Green Molecules,” Anil Kumar Chalamalasetty, CEO and Managing Director at Greenko said.
John Cockerill decided on the terms of a 50:50 joint venture to set up a two akaline electrolyzer factories of a gigawatt each in India over the next 12 to 18 months to make the lowest cost hydrogen in the country for industrial users.
out a feasibility study on green hydrogen production after discovering a proper site by the end of Greenko,2022.owned by Singapore’s sovereign
steelmaker Posco has signed a memorandum of understanding (MoU) with ZeroC, a subsidiary of Indian renewable energy company Greenko to make green hydrogen, and to jointly pursue opportunities in renewables, and other derivatives of green hydrogen, a joint release issued by the groups said.
Posco has started designing a hydrogen reduction steelmaking demonstration plant and took the first step in the 2050 carbonneutral roadmap.
Posco said that the production of green hydrogen and ammonia in India will be based on pumped-storage hydroelectricity, which generates electricity by pumping and storing water into a high-lying reservoir at night and dropping water in the daytime when power consumption is high.
30 Steel Insights, September 2022 INTERNATIONAL
It had signed a business agreement for hydrogen reduction steelmaking engineering technology cooperation with Primetals, a British plant construction company in July.
Posco plans to verify the commercial feasibility of hydrogen reduction steelmaking by 2030. After that, the company plans to achieve carbon neutrality by 2050 by gradually replacing the current blast furnace with production.facilitiesHyREX-basedafteroptimising
Cho Joo-ik, Head of Posco Holdings’ hydrogen business projects (third from left) and Gautam Reddy Kumbam, Head of New Energy at Greenko (fourth from left) after signing the agreement.
Steel Insights Bureau
“Through cooperation with Greenko, we will successfully establish a green hydrogen production model in India and prepare to supply green hydrogen and ammonia that are required in South Korea and Europe,” POSCO Holdings hydrogen business head Cho Joo-ik said.
Tata
Steel Insights Bureau
“It is a step aligned to the company’s goal of achieving Net Zero carbon emission by 2045,” the company said in a release.
The MoU was signed in the presence of Bhagwant Mann, Chief Minister of Punjab.
“The investment by the Tata Group in the steel sector in Punjab will boost industrial growth in the state. This is a proud moment for Punjab. My Government extends full support to make this venture a great success. I am confident that the youth of Punjab will benefit from the employment opportunities generated by this project,” Mann said.
T V Narendran, Chief Executive Officer & Managing Director, Tata Steel, said: “I would like to thank the Government of Punjab for their support towards our ambitious greenfield project in the State. Punjab is an ideal location for our electric arc furnace given its proximity to the market and scrap generating Auto hub. Steel produced through the recycled route entails lower resource consumption and lower carbon emissions, which reinforces our commitment to reducing the environmental impact of our operations. We see a good longterm potential of growth for steel making through scrap route in India, if effective and simplified scrap collection policies are made and Inimplemented.”Augustlast year, Tata Steel commissioned its first steel recycling plant
Tata Steel to set up scrapbased EAF steel plant in Punjab
This initiative to set up the greenfield facility at Kadiana Khurd, Hitech Valley, Ludhiana in Punjab is part of Tata Steel’s commitment to investing in a circular economy and transitioning to low-carbon steelmaking through the steel recycling route.
Steel Ltd has signed a Memorandum of Understanding (MoU) with the Government of Punjab for setting up a 0.75 million tons per annum (mtpa) long products steel plant with a scrap-based electric arc furnace (EAF).
36 Steel Insights, September 2022
The state-of-the art EAF-based steel plant would produce construction grade steel rebar under the company’s retail brand ‘Tata Tiscon’, which would enable Tata Steel to further augment its market presence in the construction segment.
CORPORATE
T V Narendran, Chief Executive Officer & Managing Director, Tata Steel and Bhagwant Mann, Chief Minister of Punjab during the signing of the MoU
The state-of-the art EAFbased steel plant would produce construction grade steel rebar under the company’s retail brand ‘Tata Tiscon’, which would enable Tata Steel to further augment its market presence in the segment.constructionPunjabis an ideal location for our electric arc furnace given its proximity to the market and scrap generating Auto hub.
Q1 performance
SAIL clocked its best ever production during April-June quarter as compared to the Q1 of previousCrudeyears.steel current quarter production is 4.33 million tons (mt) and Q1 FY22 it was 3.77Themt. sales however are a bit lower at 3.15 mt as compared to 3.33 mt in Q1 FY2022.
Steel Insights Bureau
The average price realisation for the first quarter was `66,000.
Steel Insights, September 2022 39 CORPORATE
“Sales have been affected due to lower exports during the quarter however the home sales has seen a growth compared to comparable period of previous year. The financial performance has seen a growth in the topline whereas the profitability has taken a hit in line with the industry trends,” Tulsiani said.
“In the month of July we had sales of more than 1.4 million. we also had a very strict targets for our marketing team and we are planning to have the highest ever August also,” he said.
The revenue from operations is at `24,029 crores as compared to `20,642 crores in Q1
With
steel prices bottoming out and coking coal costs correcting significantly, Steel Authority of India Ltd (SAIL) sees its financial performance reviving in coming months.
In this coming quarters the domestic
“There is a tendency to push down the prices of flats but the longs are holding,” he said.The average Net Sales Realisation (NSR) per ton for Q1 of FY23 was `66,829 compared with Q4 of FY22 level of `59,495 while for Q1 of FY22 it is `53,929.
“If this trend goes through for the (current) quarter then, though the results for July are not good, may be from August onwards, our performance will be better on the financial front also. With the coking coal prices coming down, we expect the cost of production to also correct and enable us to deliver better results in the coming quarters,” Anil Tulsiani, Finance Director, SAIL, told analysts during a conference call.
consumption is surely going to go up and Tulsiani sees SAIL achieving its target.
Volume recovering
“The global steel industry has seen a decline in the demand and corresponding realisation for the past few months. With China seemingly cutting down its production in the wave of environment concerns, it has had its impact on the prices of iron ore,” he said.The prices of steel which were at the peak during April have considerably declined with flat products feeling relatively much greater adverse impact than the longs, since it is guided by the international market. In the longs segment, secondary sector plays a major role and uses thermal coal for its EAF DRI route. The prices of thermal coal have not come down much as compared to the coking coal which has kept the prices of longs relatively in a better position.
Steel prices
“With the monsoon just going off from August the purchases will go up basically in the long products so yes we surely have a good advantage since we have a slight a big range of the long products also and quite a large component also,” he said.
But in the month of June it came down to `58,000 and in the month of July it was around about `1,200 to `1,300 lower. For July, average price realisation was around `57,000.
Anil Tulsiani, Finance Director, SAIL, visiting Dalli-Rajhara iron ore complex, where he was explained the working of the Slime Beneficiation Plant of Dalli mechanised mines.
Prices in August compared with July was more or less flat, and around `1,200 to `1,300 lower than June level, he told analysts post the financial results announcement.
SAIL sees steel fortunes reviving
As per a 2018 report of the United Nations, an additional 2.5 billion people are expected to live in urban areas. It is projected that India will have added 416 million urban dwellers, China 255 million and Nigeria 189 million.“This macro factor will require enormous construction activity,” Deb commented.
“The government’s policy measures like Production Linked Incentives (PLI), push for the creation of infrastructure, and expansion of capital expenditure have been attracting large amounts of investments from the private sector. These factors provide the comfort that India can sail through the challenges with minimal impact and this is reflected in the higher than world average growth rate assigned to India by global financial institutions,” Deb said.
The Russia-Ukraine conflict and the continued impact of Covid-19 in China have been dampening the demand for steel in 2022.Consequently, demand for iron ore has been declining and prices have been volatile with a downward bias in June and July“Thus,2022. the outlook for the iron ore market is not encouraging in short term. However,
Ltd expects to mine 46 million tons (mt) of iron ore in FY23, which will be 10 percent more than 42.19 mt mined in the previous year, Sumit Deb, Chairman and MD, told shareholders during the annual general meeting of the company.
NMDC CMD Sumit Deb (middle) addressing shareholders virtually at the AGM of the company.
Steel Insights, September 2022 43 CORPORATE
Outlook
the current year and add about 2.5 mt of production.
State-owned
“It is noteworthy that 2022 production was 4 percent higher than 2,500 mt in the pre-pandemic year 2019. In terms of countrywise output in 2021, with 900 mt Australia continued to be the largest producer of iron ore. India’s production was 240 mt and emerged as the fourth largest country after Brazil (380 mt) and China (360 mt),” Deb said.In terms of iron ore reserves, Australia tops with 51,000 mt, followed by Brazil with 34,000 mt, Russia with 25,000 mt, China with 20,000 mt, Ukraine with 6,500 mt, Canada with 6,000 mt and India with 5,500 mt.
Steel Insights Bureau
NMDC eyes 46 mt ore production in FY23
“Government’s reform in the mining sector is expected to give a fillip to this
iron ore miner NMDC
Global output and reserves
“NMDC and other miners of Karnataka welcome the Supreme Court’s recent judgment allowing the iron ore producers to enter into a direct contract with buyers.”
long-term demand for iron is expected to be positive,” he said.
The company had achieved sales of 40.56 mt in FY22 generating revenue of `25,882 crore.“We target production of 460 lakh tons of iron ore in FY23. This volume is about 10 percent higher than in FY22 and would provide a cushion against possible pressure on pricing and we hope to maintain and surpass the top line again in FY23. Dismantling the e-auctions through Monitoring Committee in Karnataka would be an additive to both the top line and bottom line,” Deb said in his address.NMDC has appointed consultant for its fifth line of screening and the downhill conveyor augmentation project at Bacheli mine, which is expected to be ready in
The global output of iron ore in the calendar year 2021, as estimated by the US Geological Survey was 2,600 mt, 5.3 percent higher than 2,470 mt in 2020.
62 Steel Insights, September 2022
