A new dawn in waiting for steel sector

The month of May was really an exciting month for the Indian steel industry with new steel policy coming out and also India emerging as the 2nd largest stainless steel producer overtaking Japan. Moreover, it was also an eventful month for MMR publication for not only we have concluded the 9th edition of Metal Outlook and Market Trends seminar with a big bang but also we have been successful in getting the assent for the recommendations made by MMR Publication to the Ministry of Steel. 

We have put forth five recommendations on the basis of concern expressed by the producers and traders during the seminar. In our recent meeting with the Honourable Secretary of Steel, Dr. Aruna Sharma, she has conveyed her endorsement to the MMR recommendations and expressed assurance for its implementation at the earliest. We have enclosed a detail report of the meeting and recommendations in the upcoming pages.    

Now, coming to the New Steel Policy, as you are aware, it has opened plethora of opportunities before us with a set target of 300 mt by 2031. However, this is an ambitious target and in order to achieve this target we have to ramp up our production and infuse funds and technology. Moreover, the emphasis given to quality control will do away with substandard metals from finding its way in to the country. On the other hand it will be bit painful for  the cash trapped secondary steel sector as they will find it difficult to go for technological up-gradation and capacity expansion.

Even though, the government has made it clear that there will be no government aid for the secondary steel sector, but the ‘India First’ philosophy as a guiding principle will certainly encourage the primary Indian steel manufacturers.  Moreover, the government is also encouraging FDI so that foreign players can come to India and form joint ventures with the secondary players.  The ministry of steel has recently expressed that it  is quite open for any transfer of technology and it will welcome the foreign players to sign MoUs. 

However, apart from steel ministry, the other ministries of government have to play a proactive role for creating domestic demand by pushing infrastructure development to greater heights. Moreover, higher standards of living across the globe combined with an urgent need for new technological solutions would drive the Indian stainless steel manufacturers to the global arena.

Moreover, with GST in the pipeline, steel companies could be looking at lower input costs with key inputs like coal, iron ore pegged at 5%, which is the lowest slab under GST. Besides, with a substantial slash in transport costs due to unified and standard tax rate under GST, is likely to help steel companies reeling under large debt and also keep steel prices stable. 

In a nutshell, India’s steel sector is well balanced for a solid growth. With the Centre set to spend Rs 4 lakh crore on infrastructure build-up including shipping, railways, and national highways, will further boost the domestic consumption. So, let’s gear up for a robust growth trajectory.