India steel production rises as companies commission new projects

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India’s steel story continues to grow in 2021. New plants are being commissioned and major steel companies are reporting growth in production, too.

India’s leading producer, Tata Steel, for example, has reported in the current quarter of fiscal year 2022, production of 4.62 million tons against 2.99 million in the same period last year.

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India’s steel highs and lows

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In March-April 2020, India’s steel capacity utilization plunged as a result of the nationwide lockdown imposed to curb the spread of COVID-19.

But now, things are changing for the better, according to production reports, uptake reports and analyst forecasts.

The World Steel Association (WSA) reported India’s production rose by almost 47% in May this year.

Meanwhile, one of India’s major steel companies, Jindal Steel, will set up an integrated steel plant with an annual production capacity of 2.25 million tons in India’s southern province of Andhra Pradesh. The State Investment Promotion Board approved Jindal Steel Andhra Limited’s proposal to set up the multimillion-dollar integrated steel plant.

Rising steel capacity

Steel capacity utilization in the country is likely to rise with the lifting of COVID-19 pandemic lockdowns. Companies are expecting a bounce-back in domestic steel demand. Steel experts are of the view that capacity utilization levels may rise between 60-80% this fiscal year.

According to the WSA, India was second in the list of highest steel producers in May.

China produced 99.5 million tons, up 6.6% on May 2020. Meanwhile, India produced 9.2 million tons, up 46.9%.

Japan, on the other hand, produced 8.4 million tons, up 42.2%. The United States produced 7.2 MT, or up 47.6%. Meanwhile, Russia produced an estimated 6.6 million tons, up 14.0%.

According to a recent report by Indian credit ratings agency ICRA Ratings, India’s total steel capacity in the fiscal year ending March 2022 will likely rise to 150 million tons a year. ICRA has factored in capacity additions during the year, including a brownfield expansion by private-sector JSW Steel’s Dolvi unit in the western state of Maharashtra.

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