The overall steel production volume in India will remain flat in the current fiscal because the global steel sector is suffering from 300 million tons (mt) of overcapacity, said Susmita Dasgupta, Joint Chief Economist, Economic Research Unit, Ministry of Steel, GoI, to ISMW.
However, some demand boost can be expected in the infrastructure area, especially in freight corridors, bridges, flyovers and railway expansion projects. If India starts some new infrastructure projects, demand will shoot up and if those projects get stalled, demand will plunge. Now steel demand has become project-specific and dynamic unlike yesteryears when consumption was proportional to the GDP, she said.
Apart from that, technology-based machinery exports is another sector where steel industries can improve, especially in the areas of direct reduced iron (DRI) or sponge iron machineries, induction furnace machineries and boilers, she said.
According to Dasgupta, India has its own technology in DRI and the furnaces especially used by small and medium enterprises. This indigenous technology is being appreciated internationally, including China, Japan and many other steel manufacturing countries. Currently, the sponge iron furnaces are not doing well but Indian technology-based machinery exports are expected to do well.
In contrast, she said, for big steel manufacturing units, technological innovation is a big constraint. Advanced technology is the key to growth for any sector. Because of oversupply, steel companies are neither getting the expected price nor getting the sales volume. The financial health of steel companies has also crunched. That is why these companies are unable to invest in advanced technologies and unable to reach the next level.