While the domestic consumption of steel in India has witnessed a drop due to COVID-19 pandemic, the domestic players are using this opportunity to export steel to countries like China and others countries that have a demand for steel, stated T V Narendran, CEO and managing director of Tata Steel Limited. He was speaking at a webinar series ‘India After COVID-19’ organised by IIM Indore-FPJ supported by Big FM.
Narendran revealed, “Over the last three months, much of the steel exported out of India has gone to China. Post-COVID-19, China’s recovery rate has been much sharper than we had anticipated.” Most Indian steel producers are making some decent money from these exports, he asserted. Today, China accounts for 60 per cent of the global consumption and production of steel. Meanwhile, the rest of Asia is another 20 per cent.
He recalled that about three-four years back, China was dumping steel in India but today it is importing steel from India. At that time (when steel was being dumped into India), many questioned the competitiveness of the Indian steel industry. But this is not the case. “The steel industry was criticised for asking for support when steel was dumped in India. The steel industry at that point in time was asked to be competitive.” Today, Tata Steel is among the top ten producers of steel in the world, and there are many other Indian players who are among the top 30 producers in the world.
It is estimated that Asia consumes 80 per cent of the steel produced in the world. However, India’s share is not very huge but still has a lot of potential. Today, India is a 100-million-tonnes producer and consumer of steel. “But consumption is going to drop this year. Last year it was about 100 million tonnes. This makes us the second-largest in the world after China,” CII, president-designate, Narendran stated. He added China’s consumption is eight to nine times larger than India. “We have overtaken Japan and the United States. But the potential is huge,” Narendran highlighted. The Indian government estimates the steel consumption or production to go up to 300 million tonnes in the next 10-15 years. “This is possible if the government spends on infrastructure that it plans to set up. This is mainly because infrastructure is very steel-intensive,” he added.
India, he said, is strategically positioned in the case of the steel industry. Some countries have only demand for steel, some others have production and some have the raw material (iron ore). It is to be noted that India is blessed with all three.