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Steel industry: Long products marching ahead



National Steel Policy (NSP) 2017, which is targeting 300 million tonnes (MT) steel-making capacity by 2030, seeks to create a globally competitive steel industry in India. With the present government’s thrust on infrastructure development, construction of houses, etc, the demand for long products is going to increase manifold, says Dhirajlal Chauhan.
 
Steel is one of the world’s most essential materials. It is fundamental to every aspect of our lives, from infrastructure and transport to the tinplated steel (that preserves food). It is one of the most important products of the modern world and is of strategic importance to any industrial nation. From construction, industrial machinery and transportation to consumer products, steel finds a wide variety of applications. It is also an industry with diverse technologies based on the nature and extent of use of raw materials.
 
What differentiates the Indian steel industry from the other major producers of steel is the fact that the growth in the domestic steel industry has been driven by increase in domestic consumption of steel rather than increase in exports. Given the overcapacity in the global markets, dependence on exports may not be such a good idea.
 
Many economists and economic bodies have cited India as the only bright spot in a declining global economy. And the same can be said about the Indian steel industry. The fact that per capita steel consumption of India at 61 kg is less than one third of the world average (208 kg), underlines the huge potential for long term growth of the sector, notwithstanding improving efficiencies and change in steel usage patterns.
 
Post liberalisation of the steel sector in 1991-92, the Indian steel industry has witnessed unprecedented growth. The steel sector in India, like any major steel producing country, shows a strong co-relation with growth in domestic economy.
 
Product mix
The products of steel plants fall mainly in two categories – long and flat products.
The term long product  may include hot rolled bar, cold rolled or drawn bar, rebar, rails, wire, rope (stranded wire), woven cloth of steel wire, shapes (sections) such as U, I, or H sections, angels, channels, Ingots from continuous casting (including blooms and billets), etc. Fabricated structural units, such as bridge sections, are also classified as long products.   
 
These products are manufactured by integrated steel plants in the public sector as well as private sectors and mini steel plants.  
Long products are mainly manufactured by mini steel plants which consist of melting furnace (electric arc/induction furnace), casting facilities (continuous casting or ingot casting) and rolling facilities. These plants are scattered at various locations where availability of power and scrap is easy. The products of such plants include angels, channels, wires and hot rolled /cold drawn bars. The sizes of these products are small. 
 
Long products with large size and heavy products like rails, I beams, H sections are produced by integrated steel plants of SAIL. Table 1 provides details of products manufactured by leading steel plants in the country.
 
Some re-rolling mills which do not have steel melting facilities can also produce long products by using blooms, billets, ingots supplied by steel plants as an input.
 
Flat products include slab, plate, strip and coil, tinplate, electrical steel and certain tubular products including seamless and welded 
tube. Other steel plants under SAIL, namely Bokaro Steel Plant and Rourkela Steel Plant, produce flat products such as HR/CR coils, galvanised plain and corrugated sheets, CRNO and tin plate. 
Large steel plants in the private sector, namely, Tata Steel, JSW steel, Essar Steel and Ispat Industries produce mainly flat products.
 
Present trends
Profit margins, economic scenario and government policies affect demand changes in long and flat products. After the policy of liberalization was introduced by Indian government, lot of foreign manufacturers of automobiles and consumer durables like refrigerators, washing machines and air conditioners etc entered India. 
 
Soon, the demand for flat products viz, HR/CR steel coils went up. In the beginning, this product was imported in large quantities since the indigenous supply was insufficient and quality of these flat products was not up to the mark.
 
Hence, the steel industry was liberalised by Indian Government allowing entry of private steel manufacturers in steel making business (mostly flat products), enhancing the production capacity. The margins in flat products are more than long products margins. The competition between SAIL and private steel manufacturers also led to improvement in quality of Indian steel considerably. This situation continued for two to three decades.
 
With the present BJP government adopting a policy of ‘Vikas’ (development) there is a major thrust on infrastructure development, construction of houses, building of roads, highways, bridges etc. With this approach of government, demand for long products is bound to go up. Hence, large private steel manufacturers are diversifying their product mix. The latest example being JSW Steel, which has started manufacturing rebar (needed for construction industry) although flat product is its main product. Tata 
Steel has been producing long products in addition to flat products for over four decades.
 
The large steel manufacturers will certainly have an edge over small manufacturers due to economies of scale, superior product quality and, of course, the brand image.
 
Given such a scenario, steel plants will have to act by increasing production capacities, improving the product quality, and improving 
the brand image. Then only it is possible for them to survive in the face of stiff competition.
The new steel manufacturers may also enter the market, making the competition more intense. The existing steel manufacturers must also keep in mind the entry of new comers in this field.
 
Conclusion 
With policy of ‘Vikas’ (development) adopted by present government, the demand for long products is going to increase. National Steel Policy (NSP) 2017 seeks to create a globally competitive steel industry in India. NSP 2017 targets 300 million tonnes (MT) steel-making capacity and 
160 kgs per capita steel consumption by 2030.
With Loksabha elections due in 2019, the same policy will be continued, assuming, the BJP government comes to power. In that case, there will be steady rise in the demand for long products for at least another decade in India. Thus, the future of long products seems bright for another decade or so. However, flat products output and demand may not change significantly.
 
 
About the Author:
Dhirajlal K Chauhan is a metallurgical engineer with B Tech (Hons) and M Tech from IIT Bombay. He is a Director of METCON, a technical consultancy organisation. The service areas include heat treatment processes for various alloy tool steels, cutting and forming tools, castings, stainless steels, hard facing jobs, selection of heat treatment equipment, setting up of metallurgical lab and quality assurance in cold rolling mills, process controls and quality problems of cold rolled strips, training of personnel for heat treatment and quality assurance of CR strips. He can be reached on email: chauhan_dhirajlal@yahoo.com or 
Mob: +91 89803 94971
 
 
 
 
 
Table 1: Steel products manufactured in the country 
 
Plants Capacity in million tonne (MT) Products
Bhilai Steel Plant 3.153 Blooms, billets, beams, light structurals, channels, angles, rails and plates.
Durgapur Steel Plant 1.586 Blooms, billets, channels, joists, angles, bar, rods and rebars.
IISCO Steel Plant 0.550 Blooms, billets, beams, channels, angels and rails.
 

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