India will continue to be a net importer of steel even after
2020 as supply will not be able to keep pace with demand in the
country, a majority of speakers said at Metal Bulletin's 8th
Indian Iron and Steel conference in New Delhi.
Leaders from the Indian steel Industry, in their address to
delegates, expressed concern at the slow pace of greenfield
projects in the country, mainly due to delays in obtaining
clearances, the allocation of iron ore mines and the
availability of land for steel projects.
"India will have to import at least 3 million tonnes of steel
in 2012 and that figure is likely to increase to more than 30
million tonnes by the year 2020 as supply may not be able to
keep pace with demand if corrective measures are not taken
now," Jindal Steel and Power md and ceo VR Sharma said.
He said that the gap between demand and supply of steel at a
capacity growth rate of 5% will be 55 million tonnes by 2020 or
30 million tonnes if the growth in capacity hits 8%.
The steel supply growth rate in India over the past five years
has been at 5% while demand has been growing by 7-8%, he said.
Sharma said environmental clearances and land acquisitions were
the main impediments to setting up greenfield steel plants, and
that India's infrastructure would not be able to support the
200-million-tpy steel capacity envisaged by the year 2020.
For every tonne of steel made in the country, four tonnes of
material has to be moved, he said, adding that Indian ports,
roads and railways are not equipped to handle the growth in
India's steel imports will cost the country $40-50 billion by
2020, he said.
Essar Steel ceo and md Dilip Oommen said more than 220
memoranda of understanding have been signed to set up steel
plants, but progress on these projects has been "painstakingly"
"The current capacity is about 80 million tonnes and future
demand for steel in India will depend on its GDP, but we are
already talking about 200 million tpy of capacity requirement
by 2020 - we have to create a road map to achieve this
capacity," he said.
Sushim Banerjee, director of India's Institute for Steel
Development and Growth, also voiced concerns about increasing
imports in the near term.
"There is a likelihood of increasing volumes of imports in the
next five to six years as greenfield expansions have been held
up or delayed due to issues relating to land acquisition,
mining and mineral development... and infrastructure," he said.
However, JSW Steel's senior vp for marketing, Sharad Mahindra,
said India has emerged as the third-largest steel consumer on
rising domestic demand, that its dependence on imports was
reducing and the country has not shown any negative growth in
steel since 1995.
Demand in India was well supported by huge infrastructure
spending coupled with growth in housing, consumer durables,
auto and capital goods industry, he added.
Mahindra told delegates that India has graduated to become the
fifth-largest producer of passenger vehicles, after replacing
Brazil in 2011, and is emerging as a leading player in the
He also pointed out that exports of steel to the Middle East,
Southeast Asia and Africa have increased significantly compared
with four to five years ago.
He told delegates demand for Indian steel will remain healthy
both domestically and internationally.