Sunday 30 October,2011
Economic Times reported that steel demand is expected to hold up in India despite the global economic slowdown and the state run Steel Authority of India Limited is undertaking various measures to boost capacity.
In an interview with TOI, SAIL chairman Mr CS Verma says the steel giant is also expanding its presence in rail transportation, power generation and mineral segments.
Excerpts:
Q - How do you see the demand situation against the backdrop of the global economic slowdown?
A - My assessment is that the slowdown in the world economy is not going to impact Indian steel industry. In India, there is huge potential for growth because the per capita consumption of steel is just 35 kilogram per annum. The world average is 200 kilogram per annum. China is above 400 kilogram, Korea is above 1,000 kilogram per capita per annum. The 12th five year plan talks about infrastructure spending of USD 1 trillion.
The World Steel Association has given a demand projection of 5% globally and for India they have pegged demand at 13% in 2011 and by 14% in 2012. These data suggest that there is not going to be any slump in the Indian steel industry. If you see the capacity addition aspect in the steel sector in India, it would be around 110 million tonnes by next two years. There are so many projects, which are at an advanced stage of completion. We are projecting capacity of 200 million tonnes by 2020. Demand for steel will go up in India and I don't see events in Europe and US impacting Indian steel industry.
Q - How is the iron ore situation in the country?
A - To produce one tonne of steel we require roughly about 1.8 tonnes of iron ore and 0.9 tonne of coking coal. India has iron ore reserves of about 24 billion tonnes to 25 billion tonnes. Production of iron ore in India is roughly about 225 million tonnes per annum as of now. We require about 110 million tonnes per annum. We are exporting the remaining 110 or 120 million tonnes. Availability of iron ore will not be a matter of concern for India.
There will not be any shortage of iron ore in India. There could be some regional imbalances such as the recent Bellary crisis. The region accounts for about 20% of iron ore production India.
Q - What about coal?
A - India has lot of thermal coal reserves but it does not have coking coal reserves. Whatever little coking coal reserves in India we have is soft coal. We in SAIL require roughly 14 million tonnes of coking coal. SAIL also imports 11 million tonnes of coking coal. If you see the April 2010 levels, coking coal price was USD 125 a tonne and in February March it went up to USD 350 a tonne due to floods in Australia.
Prices are coming down but they are not coming down to the level we had expected. Even now, the price level is hovering around USD 275 per tonne to USD 280 per tonne. We are trying to use technology which uses non coking coal, that will gradually bring down the need for coking coal. We are also trying to acquire mines abroad to get over this problem.
Q - What about your expansion plans?
A - We have undertaken a massive expansion and modernization program. The value of this program is $18 billion. They are at a very advanced level of completion. We have already spent INR 26,000 crore on various modernization schemes. Our modernization scheme will be complete in the next two years time and our capacity will be 24 million tonnes per annum.
Besides, we are expanding in power generation, rail transportation and other minerals such as acquisition of manganese ore mines. We are taking rail transportation in a big way. We are discussing with the railways about laying and maintenance of tracks. We have also finalized an MoU with Hindustan Prefab for manufacture of prefabricated steel structures, to be used in the construction industry. We have set up high-level talks with the railways for supply of coaches and we are tying up with foreign companies for technology for this.
(Sourced from ET)
Economic Times reported that steel demand is expected to hold up in India despite the global economic slowdown and the state run Steel Authority of India Limited is undertaking various measures to boost capacity.
In an interview with TOI, SAIL chairman Mr CS Verma says the steel giant is also expanding its presence in rail transportation, power generation and mineral segments.
Excerpts:
Q - How do you see the demand situation against the backdrop of the global economic slowdown?
A - My assessment is that the slowdown in the world economy is not going to impact Indian steel industry. In India, there is huge potential for growth because the per capita consumption of steel is just 35 kilogram per annum. The world average is 200 kilogram per annum. China is above 400 kilogram, Korea is above 1,000 kilogram per capita per annum. The 12th five year plan talks about infrastructure spending of USD 1 trillion.
The World Steel Association has given a demand projection of 5% globally and for India they have pegged demand at 13% in 2011 and by 14% in 2012. These data suggest that there is not going to be any slump in the Indian steel industry. If you see the capacity addition aspect in the steel sector in India, it would be around 110 million tonnes by next two years. There are so many projects, which are at an advanced stage of completion. We are projecting capacity of 200 million tonnes by 2020. Demand for steel will go up in India and I don't see events in Europe and US impacting Indian steel industry.
Q - How is the iron ore situation in the country?
A - To produce one tonne of steel we require roughly about 1.8 tonnes of iron ore and 0.9 tonne of coking coal. India has iron ore reserves of about 24 billion tonnes to 25 billion tonnes. Production of iron ore in India is roughly about 225 million tonnes per annum as of now. We require about 110 million tonnes per annum. We are exporting the remaining 110 or 120 million tonnes. Availability of iron ore will not be a matter of concern for India.
There will not be any shortage of iron ore in India. There could be some regional imbalances such as the recent Bellary crisis. The region accounts for about 20% of iron ore production India.
Q - What about coal?
A - India has lot of thermal coal reserves but it does not have coking coal reserves. Whatever little coking coal reserves in India we have is soft coal. We in SAIL require roughly 14 million tonnes of coking coal. SAIL also imports 11 million tonnes of coking coal. If you see the April 2010 levels, coking coal price was USD 125 a tonne and in February March it went up to USD 350 a tonne due to floods in Australia.
Prices are coming down but they are not coming down to the level we had expected. Even now, the price level is hovering around USD 275 per tonne to USD 280 per tonne. We are trying to use technology which uses non coking coal, that will gradually bring down the need for coking coal. We are also trying to acquire mines abroad to get over this problem.
Q - What about your expansion plans?
A - We have undertaken a massive expansion and modernization program. The value of this program is $18 billion. They are at a very advanced level of completion. We have already spent INR 26,000 crore on various modernization schemes. Our modernization scheme will be complete in the next two years time and our capacity will be 24 million tonnes per annum.
Besides, we are expanding in power generation, rail transportation and other minerals such as acquisition of manganese ore mines. We are taking rail transportation in a big way. We are discussing with the railways about laying and maintenance of tracks. We have also finalized an MoU with Hindustan Prefab for manufacture of prefabricated steel structures, to be used in the construction industry. We have set up high-level talks with the railways for supply of coaches and we are tying up with foreign companies for technology for this.
(Sourced from ET)
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