Week in Review: Can India Meet Its Ambitious Goals for Renewables and Steel?

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This doubtful week, a Stanford economist made the bold proclamation that electric vehicles will completely displace their petrol and diesel counterparts by 2025, and India’s plan to triple steel production by 2030 was met with more than a few raised eyebrows.

Grand Plans

AdobeStock/yuratosno

Speaking of India, its ascent as a promising market for renewable energy has been truly impressive. Consultancy EY recently published its 2017 Renewable Energy Country Attractiveness Index (RECAI), and India took the number two spot, beating out the U.S., which slipped to third place.

India had been number nine in 2013, before Narendra Modi, who views developing renewable energy to wean India off coal as a top priority, became prime minister. Modi aims to boost India’s renewables capacity to 175 GW by 2022 (currently capacity stands at 57 GW).

India has similarly high ambitions for steel, as Sohrab Darabshaw reported earlier this week. The country aims to triple its steel production capacity by 2030, which would mean adding 182 million tons of capacity.

“While some have welcomed the document, other sector experts have expressed uncertainty over the projections in the policy,” Darabshaw wrote. One of the naysayers is the ratings agency Crisil, which pointed to the fact that India has only added 55 million tons of capacity in the past decade.

Grand Predictions

Stanford University economist Tony Seba, “well known for his challenging and — some would say — self-publicising proclamations,” as Stuart Burns put it, made the prediction that electric vehicles will have completely overtaken diesel and petrol cars by 2025. It’s “almost certainly wildly optimistic,” Burns argued.

No one can deny that in recent years there have been huge advances in electric and driverless cars. “Seba sees this as the end of Detroit, Wolfsburg and Toyota City — and the rise of Silicon Valley. But reports of automakers’ demise may be greatly exaggerated, to paraphrase Mark Twain’s popular misquotation,” Burns wrote. “Established automakers do have massive legacy investments in the internal combustion engine, but so far only Tesla is coming close to giving them a run for their money in electric vehicles.”

Grand Prices

U.S. hot-rolled coil prices fall in May. Source: MetalMiner IndX

Let’s conclude this “Week in Review” with a look at steel price trends. “Steel buyers should be in no rush to purchase steel,” Raul de Frutos concluded in yesterday’s article on U.S. steel’s recent price decline, which he expects to continue.

“U.S. steel prices had no choice but to decline as the spread between U.S. and international prices had widened to unsustainable levels,” de Frutos pointed out. “I suspect that the recent price decline is just the beginning of a deeper correction that could easily extend to the rest of the second quarter.”

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