Recession Clouds Darken

steelworldblog — Sat, 01 Oct 2011 06:38:26 +0000

The clouds of recession turn darker as the industry slows down. The input costs are rising and the demand is shrinking. The steel plants today are operating at a lower capacity utilization for many reasons. Apart from the issues mentioned above availability of iron ore has become a major problem for the iron & steel industry in India. In many areas, mining was closed due to violation of environmental norms, legal framework etc. While this is all justified and should not be challenged, this has reduced the availability of iron ore, increased its price and finally damaged the bottom line of the industry. The small plants are even complaining that the Fe rich ore is being allocated to big plants and small buyers are getting sub standard material. All this has resulted in loss of sentiment and has reduced the production levels as well.

The state of Chattisgarh is country’s biggest steel making state and the future of steel industry in India also depends on how the industry is performing in this state. Though the state administration is developing new industrial zones, the infrastructure needs to be improved a lot. Also there is a huge need for technically skilled manpower taking into account the future growth of iron & steel industry in this region. The capital city should have the facility of ICD (International Container Depot) for easy import of steel scrap. This will help to reduce their dependence on iron ore and also help to improve the finished steel quality. I think this long standing demand of the steel industry in Chattisgarh is well justified and needs to be attended to.

Finally a word about iron ore fines. Now it is proven fact that pelletization improves the viability of the mini steel complex and also utilizes otherwise wasted ore fines. For the last few years the industry was struggling to find the right technology for mini pelletization plants but now this struggle seems to be over. Few pellet plants have started commercial production and are running quite well. I hope to see many such plants mushrooming around mining belts and even the government can promote pelletization by may be extending soft loans to such projects. This will surely give a big boost to this sector and the mountains of iron ore fines lying around the mines will be utlilised.

D.A.Chandekar

Steelworld Blog

Recession Clouds Darken