India’s steel story is being closely monitored globally as well as within the country, more so because of the installation of a new, business-friendly government back in May 2014, and the nation’s assertion of wanting to be able to make 300 mtpa by 2030 as reported by MetalMiner.
The steel growth story becomes important when the Government wants to divest some shares in its own steel companies such as the Steel Authority of India Ltd (SAIL).
In the middle of an economic slowdown, India plans to chop off a 5 percent stake in its largest steel company in the next few days, lowering the country’s shareholding in SAIL to 75 percent from the present 80. At current market price, the sale is expected to fetch about $300 million.
Going by the initial signs, there does not seem to be much of an appetite among investors for the SAIL stake. One reason is there is not much demand for steel in India because of the slowdown. So, in a sense, the Government of India finds itself in a Catch-22.
India plans to auction off $10.5 billion worth of state-owned company stock this fiscal year, beginning with SAIL, but if investors show no eagerness, the plan could go awry.
Not everything related to Indian steel is dismal news, though. The China Post has reported that China Steel Corp., the largest steel maker in Taiwan, could start production at its plant in India by the end of this year.
China Steel has invested $236 million in building the electrical steel plate production site, located in Indian Prime Minister Narendra Modi’s home State of Gujarat. Work at the site is almost 95 percent complete, and trial production is scheduled to begin in September, said the report.
The plant will eventually roll out 200,000 metric tons of steel products a year. This is one of the fastest steel plants to be set up in India, having been completed in just two years, as compared to POSCO’s mammoth steel plant in Odisha, which even a decade later, remains only on paper.
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.