Indian government readying new PLI scheme for steel sector
In an interview with PTI, Minister of State for Steel, Faggan Singh Kulaste, confirmed that the Indian government is actively working on the Production Linked Incentive (PLI) scheme 2.0 for the steel sector in 2024. The government will ensure raw material supply and promote the use of scrap. Centre will also push for the use of artificial intelligence and new-age technologies among the industry players to boost steel output while also looking at ways to reduce carbon emissions.
Steel production and consumption showing a strong recovery
From April to November this year, crude steel production reached 94.01 million tons, a 14.5% increase year-on-year, while finished steel consumption rose 14% to 86.97 million tons, according to the Ministry of Steel. India's goal is to achieve a steel manufacturing capacity of 300 million tons by 2030, with the current capacity at around 161 million tons. Kulaste predicts significant growth in steel production and demand in 2024 due to infrastructure projects.
Indian Steel Association raised concerns over imports
The Indian Steel Association (ISA) has raised concerns about soaring imports and high raw material prices impacting the domestic market. ISA Secretary General Alok Sahay said the industry hopes for strong government action to curb import growth, which has risen by 18% to 5.87 million tons from January to November 2023 compared to the same period in 2022. Sahay also mentioned that the government is considering including refractories in the upcoming PLI scheme 2.0 for steel.
Steel makers urged to increase their product mix
Kulaste encouraged steel producers, such as state-owned SAIL and RINL, to diversify their product offerings to meet the growing needs of various sectors requiring steel. Tata Steel has observed a demand recovery due to increased infrastructure spending in advanced economies and a strong rebound in the auto sector. JSW Steel's Joint MD & CEO, Jayant Acharya, stated that India's steel sector has seen an impressive 15% growth this year, driven by infrastructure, manufacturing, energy transition, and related sectors.
CRISIL expects elevated steel imports amid strong domestic demand
CRISIL predicts that strong domestic demand, backed by government spending on infrastructure, building, and construction segments, will keep India's steel imports around six million tons this fiscal year, even as the global steel industry faces a slowdown. Jayanta Roy, Senior Vice President & Group Head-Corporate Ratings at ICRA, said that from April to November of FY24, domestic steel consumption growth remained strong at 14.8% due to the government front-loading infrastructure spending ahead of the upcoming general elections.
