2017: The Year Of Long-Overdue Restructuring Of Steel Industry

The commencement of a long overdue restructuring of the Indian steel industry may be seen as one of the sectoral milestones of 2017.

- Tamajit Pain

The year also saw two policy interventions by the government aimed at boosting domestic production  and consumption of value-added steel in government projects. Several steel companies, including some promoted by big corporates, were referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. The steel sector accounts for almost 30 percent of the non-performing assets of the banking industry.

Seen as a long overdue measure, this happened at a time when the domestic industry regained its fundamentals amid strong export demand and a revival of the domestic market. Crude steel production rose by more than 5 percent to touch 92 million tons between January and November 2017, according to official data.

Exports amounted to 8.9 million tons in the first 10 months of calendar 2017, against imports of 6.6 million tons of finished steel. This year too, the government safeguarded the interests of domestic players by imposing a 4 percent additional dumping duty and a 1 percent countervailing duty. “Indian exporters got a bigger export market at a time when overall sentiment was good,” industry sources said.

Indian steelmakers also became more competitive during the year on grounds of quality and their deliveries. Firms like Tata Steel and JSW harnessed advanced technology to augment quality.

Mention may be made of the Hilsarna technology. Tata Steel said it expected this technology to go commercial in about a decade, enabling it to reduce footprint and costs.

India’s largest steel producer Steel Authority of India also improved product quality through use of this technology.

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