New Delhi: Enthused with the resurgence in steel sector, the government anticipates the country is set to emerge as the world’s second-largest steel producer by 2016 as the capacity would rise three-fold to 120 million tonnes.
The government had projected 65 million tonnes of production capacity by 2010-11 in the National Steel Policy, but now these estimates have been revised to 80 MT,“ Steel Secretary R. S. Pandey told PTI in an interview.
“Given a conducive mineral policy framework, this country should be producing 120 million tonnes by 2015-16 and 180 MT by 2019-20,” Pandey said, exuding confidence that by 2015-16 India will be the world’s number two steel producer.
The country is currently the world’s seventh-largest producer of the alloy with a capacity of around 44 MT. China is at the top with a capacity of 418 MT, followed by Japan with 116 MT and U.S. with a capacity of 98 MT.
India was at number eight position in 2005 and ninth a year before that, Pandey said, adding “we are witnessing an era of resurgence in the steel sector”.
“Tables have turned. Indian companies are on buying spree abroad and they are acquiring companies of much bigger size than theirs. We are are growing much faster at about 1.5 times what we had anticipated,” he said.
Among the recent overseas acquisitions are Tata Steel buying Anglo-Dutch firm Corus for over $12 billion (Rs50,451 crore) and Essar clinching $1.58 billion takeover of Algoma Steel in Canada.
Asked whether this could lead to a glut in the market, Pandey said: “All investors have done their home work... demand is really going to shoot up in India and to meet that they (producers) are gearing up.”
Pandey said while framing the National Steel Policy 2020 the government had anticipated a growth of 7.3% in production and 6.9% in consumption annually.
But production has grown by 10.1% and consumption by 10.7% in recent years.
Pandey, however, said China would be a crucial factor. The global giant’s demand is growing and so is their supply. In such a scenario, the winner would be the one who produces steel competitively, he added.
“Better production competitiveness with best of technology and with the least cost is going to be the success mantra for steel companies,” Pandey said.
The industry has been, however, waiting for a conducive mineral policy, especially amid the debate surrounding export of iron ore, a crucial input for steel making. Government is in the process of framing a policy on whether companies should be allowed to export iron ore from India.