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India is poised to become the second biggest steel producing nation in the world after China over the next 12 to 18 months, as steelmakers continue adding capacities in anticipation of upcoming demand. This is despite the slow pace of current steel consumption in the country.
India鈥檚 overall finished steel output over April-January was only 82.87 million mt, equivalent to 68% of installed steel capacity of 122 million mt/year.
India鈥檚 steel ministry is drafting a new steel policy to raise the country鈥檚 steel production capacity to 300 million mt/year by 2030-2032, deftly pushing back the previous target of reaching this output by 2025, which industry insiders had long derided as impossible to achieve.
A number of private and state-owned mills have almost doubled their steelmaking capacities over the past five years. The front runner was India鈥檚 largest steelmaker, state-owned Steel Authority of India Ltd, which increased crude steel production capacity to 20 million mt/year from the previous 13 million mt/year.
But the increase in demand for steel is struggling to keep pace with the rise in capacity. Recent data from India鈥檚 Joint Plant Committee shows that during April 2016-January 2017, SAIL鈥檚 overall finished steel output rose by an impressive 15.6% year-on-year, but only reached 9.95 million mt, way behind installed capacity of 12 million mt/year.
While SAIL management aims to produce about 15 million mt of finished steel during the fiscal year ending March 31, company officials estimate real out put at about 13 million mt.
Moreover, company management has indicated that output will rise by a further 20% during the coming financial year to 17 million mt. SAIL aims to com plete some expansions in the year that will lift finished steel capacity to 20.2 million mt/year.