AME forecasts that iron ore demand from India will recover in 2022 to 188Mt, up 4%, as the government looks to maintain industrial output at all costs. The country is currently the second-largest consumer of iron ore after China, accounting for 8.3% of global demand in 2022.
Over the medium term
from 2023 to 2027, it is estimated that the demand from Indian will increase to
263Mtpa, at a CAGR of 7%. The structure of the steel industry in India is
undergoing a rapid transformation as part of the industry’s expansion, such as ‘Make
in India’ campaign to meet 2030 capacity targets.
Over the long term, iron
ore demand will grow at a CAGR of 5.7%, to reach 540Mt in 2040, driven by
demand for pig iron as well as by DRI production. Under the government’s steel
production strategy, the industry will shift from being dominated by
small-scale EAF and IF producers to being dominated by mega-integrated steel
mills, utilising multiple technologies, owned by the country’s five largest
steel producers.
Although EAFs currently account for a majority of production,
they are reliant on ore-based metallics, including cold pig iron and sponge
iron, due to a lack of scrap availability in the country. Increasingly, AME
expects many of the brownfield expansion projects to increase their use of hot
metal directly into EAFs, which will see the share of BOF refined steel grow
more slowly than the ramp-up of pig iron production might suggest.
India has pledged to
reduce the carbon intensity of their economy by 40% and reach 500GW of
renewables by 2030. It also pledged to carbon
neutral by 2070. ‘Green New Deal’ is a possible roadmap for India’s net-zero
transition.
In past decades, unsustainably low domestic prices for raw
materials such as iron ore and coal helped drive the country’s high growth
rates. India’s per capita energy use today is lower than most nations. Its use
of materials such as iron ore is still modest.
The government has now imposed a 50% tax on iron
ore and concentrates, non-agglomerated and agglomerated, implying that all
grades will now be subject to the higher duty. The government said that iron
ore pellet exports are now taxed at 45%, while it was previously exempt from
tax. In the meantime, the government has waived customs duties on the import of
some raw materials, including coking coal and ferronickel, to reduce costs for
the domestic industry.

JSW Steel
Indian steel producer
JSW Steel has commenced operations of its sinter plant #2 at Bhushan Power and
Steel Ltd (BPSL), Rengali-Sambalpur, Odisha state. The commissioning forms part
of the company's plan increase crude steel capacity by 3.5Mtpa. By the
beginning of the 2024 fiscal year BPSL's expansion will reach 5Mtpa capacity,
with the steelmaker having ordered the PCI systems for two blast furnaces and
additional meltshop and a wire rod mill.
Future expansion plans at the facility
are to increase crude steel capacity to 15Mtpa with investment of US$7.45bn.
The JSW Steel will soon launch a 0.25Mtpa tinning line #2 at Tarapur plant
and a continuous annealing line at Vasind plant in Maharashtra state. From July
– September 2022, JSW Steel plans to begin the phased commissioning of a coking
plant with a capacity of 1.5Mtpa. The project will continue with adding another
1.5Mtpa coke plant during the next financial year.
Tata Steel
Tata Steel plans to more
than double its crude steel capacity from 20Mt to 42Mt over the next 10 years.
During the past few years Tata Steel has grown inorganically via acquisitions,
with new growth of around 22Mt can be achieved at its existing sites.
The
recently acquired Neelachal Ispat Nigam will have production expand to a crude
steel capacity of 10Mt from its current 1Mt. Meanwhile, the Kalinganagar steel
complex will expand its crude steel capacity from 3Mt to 8Mt, with medium term
plans for expansion to 16Mt.
India steel producer
Tata Steel will need to invest US$126m to restart its newly acquired Neelachal
Ispat Nigam Limited (NINL) during the next three months. Ownership of 93.71%
was transferred to Tata Steel’s subsidiary Tata Steel Long Products Limited
(TSLPL) in July this year via the government’s privatisation process. It is
expected half of the capital expenditure require to restart operations of the closed
mill will be invested in the current fiscal year.
Tata Steel will commit
further investment to ramp up crude steel production to 4Mtpa by 2026 from its
current 0.9Mtpa. The company will start the blast furnace in November 2022, and
other facilities thereafter which is expected to take six months. The coke
ovens and other steelmaking operations were shut down in March 2020 due to
ongoing financial losses.
Tata Steel has signed a
memorandum of understanding with the government to construct a new scrap-based
electric arc furnace (EAF) mini mill in Punjab state. The company has been
allotted a 0.47km2 site in Kadiana Khurd Industrial Park in Ludhiana.
Investment in the project will be approximately US$340m. The EAF mini mill will
have a 0.75Mtpa crude steel capacity and produce construction grade steel rebar
under the company’s brand ‘Tata Tiscon'. Tata Steel suggests Punjab is the
ideal location for an EAF due to proximity to the local market and
scrap-generating automotive hub.
SAIL
SAIL's crude steel capacity
for 2021 was approximately 21Mt, with 50Mt forecast by 2030. The majority of
this expansion is expected to come from five of the company’s steel facilities,
Bhilai, Durgapur, Roukela, Bokaro and IISCO, which will account for total crude
steel capacity expansion of 28Mt.
SAIL has held a
groundbreaking ceremony for a new slab continuous casting machine (CCM) #4 and
an additional ladle furnace (LF) at Rourkela Steel Plant (RSP) in Odisha state.
The capacity of the slab will be approximately 1Mtpa and have capabilities to
produce 210-250mm thick, 1,050-1,850mm wide and 6,000-10,500mm long slabs.
Once
operational, the caster will be capable of producing semis of commercial and
value-added grades to manufacture finished products suitable for the oil and gas,
automotive and other various industries. The project is scheduled for
commissioning in May 2025. SAIL has plans to increase the sites crude steel
capacity of 4.3Mt, to 8.8Mt by 2030.
AMNS India
ArcelorMittal Nippon
Steel (AMNS) India will acquire Essar Group’s port and power infrastructure
assets for US$2.4bn. The two companies have signed a definitive agreement and
will support AMNS India’s steelmaking facility located in Hazira, Gujrat state.
The agreement includes an equal joint venture partnership to build a 4Mtpa
capacity liquefied natural gas terminal at Hazira. The ownership of the port
assets has been in the courts since December 2020.
ArcelorMittal and Nippon
Steel acquired to the steelmaking assets for Essar Steel of US$5.7bn in
December 2019 under the Insolvency and Bankruptcy Code. The transaction will be
fully funded by AMNS India, with agreement of the assets that are captive,
which includes ports assets in Gujarat, Andhra Pradesh, and Odisha. This were
not part of the insolvency resolution process for Essar Steel. The signing
marks a significant milestone as the facility aims to expand its crude steel
capacity from 10Mtpa to 18Mtpa by 2030.
AMNS has made its investment decision in upstream
and hot rolling capabilities. New equipment for ironmaking will include two
blast furnaces, two sintering machines and three coke ovens. While its
steelmaking process will have new facilities of three basic oxygen furnaces,
two continuous casting machines, along with a new hot strip mill. Investment in
the project will require US$5.63bn and will add 6Mtpa of crude steel capacity
and implement in two phases.
Phase one, will be commissioned in mid-2025 and
include blast furnace #2 and related steelmaking equipment. While phase two,
will be commissioned in mid-2026 and include blast furnace #3 and related
steelmaking facilities. The India government has maintained its support for
infrastructure development and promotion of manufacturing industries.
AMNS
India will also acquire port related and power related infrastructure
companies. Port assets include Essar Bulk Terminal Ltd, Essar Bulk Terminal
Paradip Ltd and Essar Vizag Terminals Ltd. Acquired power assets will be Essar
Power Hazira Ltd, Essar Power Ltd and part a business of Essar Power Transmission
Company Ltd. Total acquisition cost of port and power assets are expected to be
US$2.4bn.