Editorial – April 2021

As an important input for infrastructure building, steel has always been very vital industry for the growth of the national economy. No industry can exist without the usage of steel and thus it is the main driver for not only the industry but also for the present structure of the society. The professionals like me who have spent multiple decades in this industry will always take pride in this association with the core industry like steel. A lot of sectors like infra, auto, construction, engineering and so many others use steel as a major input and their fortune is in a way linked with that of steel. Thus it is always a good feeling to be associated with such an important industry vertical of the economy.

The reason to narrate all this is that today our industry has added one more feather in its cap. As we all know, in many cases the covid patient suffers from breathlessness and requires additional supply of oxygen. Out of the total oxygen production in the country, around 80 % of the oxygen is produced by the steel plants for their regular use in iron and steel making. Today these steel plants are diverting this oxygen to the medical emergency to save the lives of our countrymen. It is the manifestation of their love for the country and for the people and our industry has made all of us, the whole steel fraternity, feel proud about it. Today, the oxygen is being carried to different locations and the states with the help of special trains organised by the railways. Thousands of patients across the country are being treated with this oxygen and are thanking our industry. It is a really great feeling !

We all also remember that in the first wave of this deadly pandemic, there was an acute shortage of ventilators and related equipment. Many companies from auto sector like Tata Motors, Mahindra & Mahindra rose to the occasion, quickly developed cost effective and multi user model of ventilators indigenously and supplied in huge numbers for this medical emergency. Mind well, they had to forego their regular vehicle production during this period. What a great patriotic gesture ! Like this a lot of help was extended by other industries as well. At individual level too, we see countless examples of such humanely behaviour. The corona pandemic is no doubt disastrous and may have posed a big threat to human existence but at the same time, has taught us a few lessons of humanity as well.

Our country may be fragmented with many religions, castes, languages, cultures etc. but such incidences assure us that from within we are one and especially at the time of crisis, we will forget all our differences and fight the situation in a united manner. Jai Hind !

D.A.Chandekar

Editorial – February 2021

Rising demand and strong prices ! What else should the Indian iron & steel sector ask for ? Indeed last few months presented more than one surprises for Indian steel industry. The demand started rising somewhere during July-August, the prices started firming around the same period and now in the month of March 2021, the sentiment in the industry seems completely positive. So much so that the government had to lower the import duty on finished steel and also on the scrap and ore in order to put some pressure on prices. These proposals in the recently tabled union budget rightly aimed at giving some relief to the steel using sector such as automobile, infra and construction.

Yes, we have reached the pre-covid production levels and that is really remarkable but is not the peak performance. If one recalls, the Indian economy was not doing well since 2017. The GDP growth rate started falling gradually. Many parameters along with the auto sales figures went southwards and the experts were busy debating whether this can be technically termed as ‘recession’. It was also argued that in today’s connected world, no country can progress in isolation. India also can not progress when most of the countries in the world (of course except China) are undergoing recessionary trends. Quite valid logic ! So my dear friends, hold your crackers and postpone your celebrations. Let us first understand that we have only climbed till the half way mark. A similar situation in Jan 2020 was termed as ‘recession’, so what is the big deal ?

Friends, the most noteworthy fact about today’s situation is that unlike in Jan 2020, its direction is northwards. We have bettered our situation and position in the last two quarters or so. Stabilized the production, strengthened the demand, rebuilt the logistic channels and imparted the required confidence to the user industry. Let me tell you this is a huge contribution not only to the growth of steel industry but also to the national economy which was struggling to come back on the track at that point of time.

So what next ? I feel still a long way to go. If India has to become a 5 trillion economy and if its annual steel making capacity has to reach to 300 mt by 2030-31, our economy has to grow by around 7.5 to 8 % annually. The ‘Indian growth story’ can emerge only out of ‘Indian steel growth story’. Lets keep going, as said in some old poem ‘Miles to go before I sleep’ !

D A Chandekar

Editorial for ‘Steelworld’s Dec 2020 issue.

The steel demand in the country seems to be increasing steadily thanks to the user sectors like infra, construction and auto. The first sign of recovery was visible in September when auto sales showed sizable improvement. Many thought it was accumulated demand as there was almost nil sale during the first few months of lockdown. When the positive trend continued in subsequent months, still it was stamped as festive spike. Now that this upward trend is still continuing, experts are believing it to be a sustainable growth. Lets hope this continues and 2021 be a better year for iron & steel sector in the country.

As mentioned in my last month’s column, after the pandemic, there is a greater need for the industry to be competitive in the global marketplace and for that it must adopt smart manufacturing processes and techniques. Many companies in the manufacturing sector have started looking at Industry 4.0 solutions for increasing the productivity, efficiency and competitiveness of the enterprise. The deadly pandemic has also taught us to care more for the mother earth and thus the iron & steel sector needs to develop environment friendly production and processing technologies creating minimum waste and controlling emission of harmful gases. One such process being developed uses hydrogen as reducing agent instead of coking coal. It is supposed to reduce the carbon footprint during steel production. The problem in developing such green processes is that they are costlier than the prevailing process. It is a big challenge to make them commercially viable so that the industry adopts them for regular use.

The covid period has not only changed the working and thinking of corporations but it has also changed the mindset and the priorities of the society. My gut feeling is that this will have a gradual but definite effect on steel demand profile. Let us remain alert and keep watching how the situation unfolds in coming months !

Editorial November 2020.

I am quite happy about the way Indian iron & steel industry is recovering from the global pandemic of covid-19. As we all know, ‘steel’ is one of the core sector of the economy and is important input to many important industry sectors like infra, construction, white goods, auto, engineering, etc. Thus the performance of steel sector affects so many industry verticals and finally has a big impact on overall economy of the country.

In the first few months of unlocking, the steel production was superseding the demand. This was natural as the steel producers were running the plants where as the construction activity was almost closed, infra projects were completely halted and hardly any vehicle was being sold. In fact many automakers were themselves involved in the noble work of manufacturing safety equipments for the people. The exports surged during this period. But now gradually the steel demand is moving up and the industry balance is getting restored.

Now that the industry is back on recovery track and cruising ahead decently, there are few other challenges peeping in. Firstly, even if the demand is recovering fast, the supply chain which was disrupted at many places has not been healed properly. Many points including the logistics has to be improved further. Secondly, this pandemic has created lot of stress and pressure within global economy and has tremendously increased the competition. This necessitates the need to produce better quality at competitive prices. Thus the producer has to adopt smart manufacturing techniques, or Industry 4.0 as is commonly referred to in India, to enhance efficiency, productivity and thus improve the bottomline of the company. Mind you, Industry 4.0 is not a just a fashionable word but the smart way of inducting the sustainability in the organisation. Sooner or later, everybody has to adopt it.

Another important outcome of covid-19 is the total change in the mindset of individuals as well as the corporations. Now, going to office everyday looks unnecessary. Instead, working from home throughout the week and going to office may be once a week looks normal. Also, planning a business tour for fewer meetings may not look professional. Video meeting or conversation completely serves the purpose. Although, most of the restrictions imposed during the lockdown are now lifted, the local trains in Mumbai and public transport systems in many metros are not fully on track. This has forced many corporations to outsource many of the professional functions which is going on smoothly. This situation has drastically reduced the need to have big number of permanent employees and also of a big office premises.

Indeed, the post covid world is different, interesting and off course challenging. One has to face it with a smiling face !

Editorial — September 2020

posted on October 30 , 2020

The world is slowly coming out of Covid fear. Finally the livelihood proved more important than life and thus professional activities have been re-started and are gearing up all over the world. Mind well, the corona pandemic has not subsided nor we have found the vaccacine but still the industry has gradually started operating. Infact in many places, there has been surge in cases but fortunately the death rate has come down and recovery rate has improved substantially.

Iron & steel industry too has been improving on it’s production figures and by now it has achieved almost 75 % of pre-covid production level. Of course I am talking about the main, integrated and big steel mills. They are comparatively better placed to handle the situation. Many big plants are far away from the main cities and have their own staff and worker’s colony. Thus depending on the market demand, they can enhance their production level in a short time. Of course, there are instances where the pandemic has spread in these colonies too. Smaller rolling mills and processing units will obviously take a longer time to stabilise their production, processing and selling. For these smaller units, the problems are numerous. They have to first look for re-employing the migrated labour. If they have not come back, then getting their replacement is a big issue as it is very difficult to get matching skill set instantly. Secondly, they have to digest the losses of last six months and then raise the new capital. Which bank or financial institution will finance a loss making unit ? Further, the supply chain has been disrupted in many places and restoring it is not an easy task. Also regaining the customer support is very important and will be decided by your past interaction and relations with them. All in all, it is going to be quite an uphill task for smaller units in iron & steel sector. Let’s see how they take on this challenge !

This unforeseen, unprecedented situation has taught all of us a lot of new things. It has really changed the way we think. Naturally, our industry too has lot of takeaways from this situation. Many old business models are collapsing where as a lot of new models are emerging. One has to access the viability of his business model in the light of this new environment. May be there is a need to change, alter or even scrap the old model (as well as the thinking) and come out with an altogether new concept. Innovation was always welcome but in this extraordinary situation it has become the ‘Mantra’ for survival. Face the new world with courage and a smile on the face. Innovate, innovate and ……… innovate ! I promise you will be the winner !

Performance delivered – The Yıldız Demir Çelik Cold Mill Complex in Turkey

TECH

Yıldız Entegre Holding has more than 100 years’ experience in industry and commerce, and in 2015 it decided to enter the steel business through its subsidiary company, Yıldız Demir Çelik. Danieli was selected as technology partner and supplier of its first steel processing plant : a new, complete cold-mill complex setup representing latest
technologies to produce 1.5M tons per year of high quality cold-rolled, tempered
and coated coils.

The p15:14 30-09-2019roduct range includes white goods applications, commercial, structural and construction grades, IF, HSS, HSLA and DP material, for demanding customers in local and international markets. In 2018 the new installation at Kocaeli started operating in sequence, and already it is producing in excess of the contractual production rate. Danieli acted as the single-source supplier for mechanical, electrical and automation equipment, and the innovative technological solutions and process knowhow applied at Yıldız have been developed by Danieli through continuous in-field experience and R&D improvements.

for complete article click here

Drivers for Sustainability of Indian Steel Industry

feature

Steel has historically been the building block of a nation’s rapid industrial development. India is a resource based country and is blessed with large reserves of Iron Ore, Coal, Limestone, i.e the main raw materials required for Iron & Steel making but its sustainability has always been a major challenge. Indian steel industry has seen several up and downs in the past but despite all odds, it has made rapid strides in the last three decades from 22 MT in FY 1991-92 prior to deregulation, to 106 MT in FY 2018-19, thus becoming the second largest steelmaker in the world, after China.
The Indian steel industry operates under three broad based process routes for production viz. BF-BOF, EAF and IF. Recognizing the opportunities available in the country, mainly due to very low per capita consumption of steel and increased focus on infrastructure development, Ministry of Steel, Govt of India prepared a road map in the form of the National Steel Policy -2017 (NSP-17) to create a sustainable Iron & Steel Industry with focus on increasing the production capacity from ~ 130 MT presently to 300 MT by 2030 and to make country self-sufficient in terms of steel and alloyed steel. Thus, the next 10 years will see huge capital investments in the Iron & Steel sector in setting up of Greenfield plants as well as Brown field expansions.
Although, India’s steel production has increased significantly but our dependency on technology and supply of some of the critical raw materials has not improved much, which is leading to huge outflow of foreign exchange. It is high time, the stakeholders of steel sector i.e the design and consultancy organizations, steel producers, R&D organizations, academia and the government work together in developing a sustainable R&D platform capable of indigenous design and manufacture of equipments/ facilities as well as provide innovative solutions to the challenges faced by the steel sector in terms of enhancing process and product capability, cost-effectiveness, competitiveness, quality and environmental issues.
Drivers for Sustainability of Steel Industry
The key drivers for sustainability of the Indian steel sector can be classified under following heads:
• Competitiveness
• Cost-effectiveness
• Quality
• Product development
• Environment and energy
Competitiveness
The competitiveness of the steel industry will largely depend on its ability to produce cost-effective steels of desired quality and volume, as per the changing market requirements. India is blessed with huge iron ore reserves of 33.3 billion tons with average iron content of 64%. Due to high Iron content, due importance could not be accorded towards adoption of the advanced beneficiation technologies like adopted in other parts of the world. Now, the grades are deteriorating and some of the deposits are facing major challenges because of high alumina content, which leads to formation of viscous slag and low productivity of the blast furnace. Similarly, Silica also is increasing continuously and impacting the competitiveness. Thus, optimum utilization of low grade iron ore in one of the most cost effective manner without compromising on environmental performance will be the major challenge for providing sustainability in the sector.

For complete article click here

Editorial April 2019

 

Dear Readers,

A few years back, Ministry of Steel (Govt of India) set a target of creating 300 mtpasteel making capacity by 2030-31 and this attracted various types of reactions from different sections within iron & steel industry of the country. Present steelmaking capacity of the country is around 135 mtpa. Thus to achieve 300 mtpa capacity, the country has to create around 165 mtpa capacity in around 12 years, i.e. around 13 mtpa of capacity addition every year.

Few analysts felt that this figure of 300 mtpa is quite ambitious and cannot be achieved while others felt that maybe this is a bit hard to achieve the target but it will help the industry to think in a positive direction and will surely provide a much required forward push. This also manifests the government’s position and its willingness to help the industry to grow. I definitely see a point in this.

We all know that to produce a tone of finished steel, three tons of raw materials have to be moved. Thus to move 900 tonnes of raw materials and 300 tonnes of finished steel, we need really huge infrastructure and transport facilities. Further, along with the finished steel capacity, the raw materials (such as iron ore, coal & coke, ferroalloys, lime etc.) availability has to be geared up. Another issue related to this acquisition bill. Greenfield steel plants require big land mass and unless this bill is passed, required land availability may not be possible. Brownfield expansions have their own limitations of land and thus can contribute only marginally to capacity creation. The last and most important point is building and running these steel plants. While there are not enough companies to design, erect and commission a steel project, there is also a huge gap in terms of technical manpower required to run the plant. Metallurgists are in a smaller number when compared to all the engineering branches. Even today, it is extremely difficult to find an experienced metallurgist to run a steel unit. To summarize, there are challenges to overcome in order to achieve the target of 300 mtpa, but again, not impossible. Nobody can deny that the overall performance of the national economy will have a very big impact on the prospects of the iron & steel sector.

My point is slightly different. ‘Steel’ being an intermediate product, should not have any ‘target’ of its own. It should only have a capacity ‘projection’ depending on the estimated demand from the user sector. While doing the projections calculations also, many ‘experts’ merely add the future capacity expansion plans of individual companies and arrive at the final capacity figure. The correct methodology should be to study various user sectors, estimate their growth rates, estimate their future demand of steel, consider an export-import factor in the light of the global economy and then finally arrive at the future estimated demand projection. In my opinion, such an exhaustive exercise only can give us a fairly realistic picture of the future growth of iron & steel industry in the country.

October Editorial 2018

In 2017, Indian economy was shadowed by demonetization in the first half and the implementation of much awaited GST.As mentioned in my last piece, one may debate on the long term utility of these measures but on a short term basis the economy did get a big jolt. Organized part of iron & steel industry did not get much affected by demonetization and infact it gained a little bit from GST implementation. Now in 2018, Indian economy seems to have recovered from these tremors and is cruising forward. The GDP growth rates of the first two quarters of 2018 (7.5 % and 8.2 % respectively) are quite encouraging for the economy as well as for the iron & steel industry. A good GDP growth rate always encourages the industry and in turn helps the steel demand to rise.

If one looks at the user industry sectors of steel, there too a positive sentiment is prevailing. Infrastructure sector which consumes maximum steel, is growing at a steady speed. Many mega projects have now shifted from drawing boards to the sites. They are expected to give a big boost to steel demand in the country. As regards construction, one may develop a feeling that it is stagnated in big metros. Yes, it may be the case but look at tier II and Tier III cities. They are growing at amazing speed and eating lot of steel in the process. Auto industry too is growing at a decent speed and creating a good demand for flat steels (body) and long products (auto parts). Of course experts feel concerned about the auto steel demand on a long term basis when electric vehicles will be popular. In any case, today all seems to be well.

 

Today, one of the major concerns of the industry is rising oil prices. It makes the transport more costly and affects all the products, industrial as well as household. As we all know, for producing a tone of steel three tones of raw materials are required. Thus in totality, four tones are transported. With these facts in mind, one can imagine the impact oil price rise is going to have on iron & steel industry.

If the industry has to progress, technology should provide the push and the direction for this transition. For the last few years, we have been talking about automation, robotics in steel sector. Now the concept of ‘smart manufacturing’ or ‘industry 4.0’ is getting popular. With implementation of this, one can not only monitor but also effectively and efficiently manage his factory by using an app on his mobile phone. I feel now is the time Indian iron & steel industry should look for such technological upgradation so as to improve on quality, productivity and overall efficiency of the plant.

 

If the industry has to progress, technology should provide the push and the direction for this transition. For the last few years, we have been talking about automation, robotics in steel sector. Now the concept of ‘smart manufacturing’ or ‘industry 4.0’ is getting popular. With implementation of this, one can not only monitor but also effectively and efficiently manage his factory by using an app on his mobile phone. I feel now is the time Indian iron & steel industry should look for such technological upgradation so as to improve on quality, productivity and overall efficiency of the plant.

Editorial September 2018

In 2017, Indian economy was shadowed by demonetization in the first half and the implementation of much awaited GST. As mentioned in my last piece, one may debate on the long term utility of these measures but on a short term basis the economy did get a big jolt. Organized part of iron & steel industry did not get much affected by demonetization and infact it gained a little bit from GST implementation. Now in 2018, Indian economy seems to have recovered from these tremors and is cruising forward. The GDP growth rates of the first two quarters of 2018 (7.5 % and 8.2 % respectively) are quite encouraging for the economy as well as for the iron & steel industry. A good GDP growth rate always encourages the industry and in turn helps the steel demand to rise.

If one looks at the user industry sectors of steel, there too a positive sentiment is prevailing. Infrastructure sector which consumes maximum steel, is growing at a steady speed. Many mega projects have now shifted from drawing boards to the sites. They are expected to give a big boost to steel demand in the country. As regards construction, one may develop a feeling that it is stagnated in big metros. Yes, it may be the case but look at tier II and Tier III cities. They are growing at amazing speed and eating lot of steel in the process. Auto industry too is growing at a decent speed and creating a good demand for flat steels (body) and long products (auto parts). Of course experts feel concerned about the auto steel demand on a long term basis when electric vehicles will be popular. In any case, today all seems to be well.

 

Today, one of the major concerns of the industry is rising oil prices. It makes the transport more costly and affects all the products, industrial as well as household. As we all know, for producing a tone of steel three tones of raw materials are required. Thus in totality, four tones are transported. With these facts in mind, one can imagine the impact oil price rise is going to have on iron & steel industry.

If the industry has to progress, technology should provide the push and the direction for this transition. For the last few years, we have been talking about automation, robotics in steel sector. Now the concept of ‘smart manufacturing’ or ‘industry 4.0’ is getting popular. With implementation of this, one can not only monitor but also effectively and efficiently manage his factory by using an app on his mobile phone. I feel now is the time Indian iron & steel industry should look for such technological upgradation so as to improve on quality, productivity and overall efficiency of the plant.

 

If the industry has to progress, technology should provide the push and the direction for this transition. For the last few years, we have been talking about automation, robotics in steel sector. Now the concept of ‘smart manufacturing’ or ‘industry 4.0’ is getting popular. With implementation of this, one can not only monitor but also effectively and efficiently manage his factory by using an app on his mobile phone. I feel now is the time Indian iron & steel industry should look for such technological upgradation so as to improve on quality, productivity and overall efficiency of the plant.