ISA Conference: Challenges and path forward for Indian steel industry
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The recent Indian Steel Association (ISA) conference brought together key industry leaders to discuss the future of India's steel industry, focusing on growth opportunities, challenges, and strategic measures to ensure sustainable development. The ISA conference highlighted the critical issues facing India's steel industry and provided a roadmap for navigating the challenges ahead. By focusing on value addition, securing raw materials, and embracing innovation, the industry can position itself for sustained growth in the coming decades.
Here are the key takeaways from the event:
1. Opportunities in value-addition - The leadership panel highlighted the immense opportunities for growth through value-addition in the Indian steel sector. However, they also emphasised that tapping into these opportunities would require addressing several challenges, particularly those related to rising steel imports, falling steel exports, squeeze in steel margins and raw material availability.
2. Growing demand for steel - Industry experts projected a significant increase in steel demand at a CAGR of about 8%, with estimates suggesting that India will require around 240 million tonnes of steel by 2030. This surge in demand is driven by urbanisation and the expansion of infrastructure, particularly in emerging urban areas across the country.
3. Mitigating the risk of dumping steel into India - The Indian steel industry faces stiff competition from imported steel which saw a sharp increase in FY'24. Hence, the domestic steel mills have urged the industry to aim at mitigating the risk of dumping steel into India to protect the domestic market.
4. Raw material challenges - The conference underscored the pressing challenge of securing adequate raw materials, especially coking coal and iron ore. With new steel capacities largely relying on blast furnace/basic oxygen furnace (BF/BOF) technology, ensuring a steady and cost-effective supply of coking coal was highlighted as a critical concern.
5. Adequate iron ore supply - The availability and management of iron ore were discussed at length. The need for a proper annual calendar for iron ore and mining block auctions was emphasised on to avoid artificial price hikes in auctions.
6. Logistics & infrastructure - Concerns were raised about logistics infrastructure, particularly the necessity of establishing slurry pipelines to facilitate the efficient transport of raw materials. Congestion at railways that slows material movement and the lower carrying capacity were cited as major obstacles. Moreover, it was noted that the majority of berths at Indian ports are still manual, lacking the efficiency of their mechanical counterparts.
7. New product development - The conference also focused on the importance of innovation in maintaining competitive advantages. Industry leaders emphasised on the need for new product development, particularly in high-growth sectors like automotive, manufacturing and ship-building.
8. Beneficiation and utilisation of domestic resources - Panelists spoke about the benefits of increasing the quantity of domestic iron ore available through beneficiation. Iron ore beneficiation capacity, which currently stands at 135-140 mnt, is likely to increase by 30-35 mnt by FY'30. However, given the depleting grade of Indian iron ore, despite ample reserves, imports of the same may increase post-2030.
9. Technological advancements - There is a necessity of leveraging technological advancements to improve efficiency and reduce costs. The development of more sophisticated and sustainable steel production techniques was identified as a key driver of the industry's future.
10. Sustainability concerns - The panel also addressed sustainability, particularly in the context of raw material sourcing and environmental impact. The need for cleaner and more efficient production processes was stressed upon, with an understanding that sustainability will be central to the industry's long-term viability.