New numbers show that India’s crude steel output last year exceeds government estimates because of under-reported data from secondary steel mills, the steel ministry said on Tuesday in a pressrelease.
The figure was revised to 50.71 million tonnes (mt) instead of 44mt for 2006-07.
With the new numbers, India becomes the world’s fifth largest steel producer, displacing South Korea in production ranks. South Korea produced 48.5mt last year. Germany, which was in sixth position, produced 47.5mt.
Government officials say there has been under-reporting of some 5mt of steel by induction furnace units, allegations that the industry denies. The Joint Plant Committee keeps track of steel production in the country and had earlier estimated that India’s production stood at 44mt last year.
The new sample study, however, relied on an indirect method of calculating sales of induction furnaces in 2005 and 2006. On the basis of sales figures, steel production in induction furnaces—which use sponge iron and metal scrap—showed a rise of 13.5mt last year against 8.5mt estimated earlier.
The study also relied on sales data from the country’s three largest induction furnace equipment makers—Electrotherm India Ltd, Megatherm Electronics Pvt. Ltd and Inductotherm India Pvt. Ltd.
The initiative to correct data reporting was launched in December last year, spearheaded by an expert committee amid growing concerns over suppression of data.
It has representations from the ministry’s economic research unit, the Joint Plant Committee as well as experts from other fields such as the Indian Institute of Technology in Kanpur.
According to a Joint Plant Committee 2002-03 survey, some 900 induction furnace units make crude steel. This steel is further sold to re-rollers to make largely structures for the housing sector. The sector reported a production of 8.5mt in 2005-06.
“There is a difference of at least 4.5mt as there has been under-reporting in the system. We had to seek an alternative route to estimate the mismatch between input and output,” said Gautam Kumar Basak, executive secretary of the Joint Plant Committee.
Sample data was also collected from 150 units to compare power consumption by the induction furnaces.
An average of 750 kilowatt-hour (kWh) was taken as a norm to produce a tonne of steel.
The data showed that about 1,200kWh was used by the mills, showing higher consumption levels—and presumably steel production, too.
Induction furnaces meet about 25% of the country’s total steel output.
The report comes at a time when various sponge iron units have been pulled up by state pollution control boards for non-compliance of environment regulations, particularly the use of anti-pollution devices such as electrostatic precipitators, which are heavy consumers of power.
The induction furnace industry, however, thinks the new report has overestimated the figures.
“We condemn the new report because there is not enough scrap going around in the country to produce so much steel,” said Raj Prasad Varshney, president of the All India Induction Furnace Association.
Production of sponge iron was 15mt last year. According to a steel ministry official, India generates about 3.5mt of scrap and imports an equal amount.