The Indian Steel Association is one of the leading and prominent traders and it was recorded to be the second-largest in the world in 2019. Deliberating on the pandemic and how adoptions have been made to the “new normal” in a world hit so hard by the virus, Deputy Secretary-General Arnab Kumar Hazra shares some interesting facts
The Indian Steel Association keeps an account of its growth every year and a plan for the coming one. While the pandemic has affected different markets and businesses worldwide, it predicted an 18-20 percent fall in crude steel production the current year (from 102 million tons to 80 million) and foreseeing the world market, Deputy Secretary-General Arnab Kumar Hazra concludes that it would take almost three years for the steel market to occupy its lost prosperity and by 2022, they would be afoot with everything.
Talking about the labour issue and loss of jobs in this unprecedented situation, Hazra cites other steel organisations in India, including EAF and IAF, that uses the induction furnace technique to produce steel and cater to the need of the small-scale companies but they are the larger providers and while the former holds 50 percent of the market, they hold the rest. It is the former that has been affected due to the pandemic and many labourers have lost their jobs but due to their usage of the blast furnace, the Indian steel company has been absolutely able to keep up their work.
Govt plan & tackling the pandemic
In India and worldwide, there are the impresarios of crude steel and related products. The Indian Steel Association, however, works on the HS chapter code 72 which deals with crude steel and the other companies wangle steel products as per chapter 73, thus putting into effect the Atmanirbhar scheme of the Indian government, enabling more usage of scrap in the steel industry that might prove to be of long-lasting help due to the reduction in the price of scrap. However, when it comes to the FDI investing in India’s steel market, Hazra incites how there are more brown fields in India than green ones and that shrinks the possibility of foreign players investing here. However, it might prove fruitful to the associations working under HS chapter 73. Due to the current locus of the pandemic, the automobile industry in India has faced a drastic downfall along with the housing construction demand of steel, which earlier was almost 62 percent and Hazra believes it would take India few years to gain back its lost glory of 2018 when the steel market was flourishing. Infrastructure, in general, is an integral part of the steel market and once India transpires this pandemic, there will only be growth.
Will the pandemic hit the steel market?
While pondering over the moot of the market’s condition during and after the Covid-19 and the prediction made by the National Steel Policy stating that by 2030, India will export 300 million tons of steel, Hazra articulates that there is a scant chance of the prediction coming true since theoretically there will always be some import and also to meet the prognostication by 2030, there has to be 206 million domestic steel consumption, which is currently impossible. The market and the need, however, determines everything and they would have reached the goal a few years after 2031, had there been no pandemic.
How are different industries surviving through Covid times?
The rapid spread of Covid-19 has put the Indian market in a quagmire. Here, the automobile industry holds 9 percent and the Railways holds 4 percent of the steel consumption whereas real estate with infrastructure and consumer durable hold 62 percent and 6 percent of the need, thus, when it comes to exporting, the products are chiefly flat but real estate and infrastructure, that hold the lion’s share consume large products that cannot be exported. Thus, the virus and the lockdown has surely slowed down the production causing many organisations other than those using blast furnaces to close down. China is the first largest steel producer in the world and held 50 percent of the market but due to the prodigious outbreak of the virus and subsequent lockdown, they too have faced a massive downfall and slowly are crawling back. Lastly, Hazra concludes that digitalisation is an integral part of the post-Covid world and upholds how there will be a synthesis in environmental norms as well. It will be crucial to overcome our fears and losses and move steadily towards a future that holds growth.