Rising demand for steel in the country: Decline in supply of China and Russia in the world market

- Ubhi Bazar ઃ Dilip Shah

- Global prices of iron ore plummeted from the top

- Serious efforts to increase steel production in India

Iron and steel markets in the country and abroad have seen a sharp rise this year. New records have been set in the market. Meanwhile, countries like China and Russia have been trying to reduce overseas steel exports, and the equations in the world market have been changing rapidly. However, this period was also a difficult one for the industry in the steel market and in the meantime, due to the slowdown in demand, many producers have reduced production and many small and medium-sized producers have shut down their units. Demand has been high since the beginning of the year. After the Corona infestation became widespread in 2030, the infestation eased in early 2021 and the cycle of trade and industry was seen to be gaining momentum again. In the US, the government decided to release a large amount of funds for the infrastructure sector and this led to hopes of increasing demand for steel there. China alone accounts for half of the world's total steel production. However there is a process of coal-fired blast furnaces used in such production. Therefore, pollution is on the rise and to curb such pollution, the government has taken steps to reduce steel production and exports. The European government has also made efforts to develop infrastructure. Focus on green energy has also increased in Europe. With government funding for infrastructure in the United States, the annual demand for steel is expected to increase by about 3 million tonnes, with experts predicting an increase in demand in the next three to five years.

India's steel producers have been seen increasing production capacity. Many manufacturers have also set a target of doubling production capacity by 2020. Steel producers in Malaysia and Indonesia have also reportedly increased capacity. Meanwhile, the world market has recently seen a decline in iron ore prices amid indications that steel production in China is declining. Recently, the weekly decline in such prices has broken a record of about 15 to 18 months. Iron was close to ડો 500 in the world market this year. However, in the subsequent period, such prices have seen a rebound of 15 to 20 per cent. India, meanwhile, has recently had a new minister in the steel ministry. The new minister has brought new ideas. Recently, he said that high steel prices were a matter of concern and hoped that prices would come down. He also hinted that the government should make efforts to increase steel production and consumption in the country. However, the government does not have direct control over steel prices and market prices are determined on the basis of supply and demand. Earlier, the government had tried to reduce the import duty and increase domestic steel supply. The government has set a target to increase steel production in the country to 500 million tonnes annually by 2020. However, demand for steel in the country has also been slow. The per capita consumption of steel has been barely 30 kg and in rural areas the figure is barely 15 to 20 kg. The government has initiated efforts to increase such consumption. The government has also recently formulated an incentive scheme associated with production in steel. The government is considering various schemes to reduce imports and increase domestic demand. Government sources are claiming that the production-based incentive scheme will change the domestic scenario in the country's specialized steel sector and reduce imports and create export conditions. At present, the annual import of specialty steel in the country is around Rs 20,000 crore and the government has initiated efforts to reduce such imports.

The country is likely to see an investment of about Rs 20,000 crore in the steel production sector by 205-20. This investment is calculated to come in the specialty steel sector. The cost of importing coking coal used in steel production is around Rs 21 to 3 crore every year. Efforts are also underway to bring such costs down by signing an agreement with Russia. The private sector accounts for about 5 per cent of the total steel production in the country while the public sector accounts for only 12 per cent. Instead of relying on thermal power to produce steel in the country, the government has asked producers to meet 51 per cent of their total power requirement from the renewable energy sector. However, producers have been given time till 2020 for this. There are indications that manufacturers will have to buy renewable energy certificates from the market if they do not meet this condition.