Are you related to steel industry?
Well, then the union budget for 2022-23 is obviously a good news for the people who are connected to steel industry in any way.
In this blog, we are going to see how?
We basically will look at the major sources that will influence the steel industry directly starting with the previous year’s growth in the steel industry.
During this period, the country’s output of finished steel registered a year-on-year growth of 28.9% to 62.37 MT, while the consumption of the same grew 25% to 57.39 MT, the survey for the ongoing financial year said.
According to the survey, the performance of the steel industry is pivotal for the growth of the economy, despite being hit by COVID-19, the steel industry has bounced back with cumulative production of crude and finished steel in 2021-22 at 66.91 MT and 62.37 MT, an increase of 25.0 percent and 28.9 percent respectively over corresponding period last year.
With the economic recovery, the global demand for steel is slated to increase his year and the next and the trend is expected to continue the next financial year as well. The PLI Scheme for speciality steel is also “well timed” to provide the necessary incentive towards investment in value added steel- a step in the direction to increase its production for internal consumption as wellas exports.
Additional measures such as domestically manufactured Iron and steel products policy, quality control order covering carbon steel, alloy steel, tin plate, tin free steel and stainless steel and a research and development scheme viz, “Promotion of R&D in Iron & Steel Sector to address the technological issues faced by the sector also aim to strengthen the industry, the Survey said.
The very next day, the India Government has announced a new budget for 2022-23 of $526.98 billion, up by 4.6% from the revised estimate for 2021-22.
The government aims to enhance job creation and boost economic activity by expanding national highways, increasing affordable housing and manufacturing new-generation trains, will directly influence the steel industry. Let’s see how?
(i) The Budget for 2022-23 is development oriented. The large focus is on the infrastructure development, which include the expansions of national highways, project of various metros in 18 cities, Expressways to be augmented in 2022-23 to facilitate faster movement of people and goods.
For the expansion of national highways and Expressways ,The ministry of Road Transport and Highways has issued order that all steel- whether produced from ore, billets, pellets or melting of scrap-would be allowed to be used for National Highway construction, as long as it meets the standards required for specific grades of steel. The steel proposed to be used would be tested in NABL- accredited laboratories as a third party check before approval. The move is based on analysis and discussion with stake holders and also technical opinion. With this step, the supplier base for steel used in the construction of national highways would increase, leading to more competition and better price discovery by the markets. This is also part of the continuous effort by the Minister to reduce costs through use of new technology, reducing restrictions on suppliers and making the procurement system transparent.
And with the development of various metros line in 18 cities some of which includes rapid metros projects. These metro projects will help the steel industry directly, as steel played a significant roles in easing transportation woes. Steel has been the preferred choice for the metro. Superior quality steel has been provided by top-notch Indian steel companies, like JSW, SAIL, RINL, etc. Public sector undertaking such as SAIL has provided 55000 metric tones of steel for Delhi Metro’s Magenta Line in 2017. It supplied TMT, structural and plates for this project. RINL too provided high-quality domestic steel to the Delhi Metro. BEML Limited manufactured and supplied 156 stainless Metro cars to DMRC for carrying out its second phase of operation in Delhi.
Private sectors firms like JSW Steel have played a major role by supplying 6,393 MT of TMT. The new project constructions of Delhi Metro have used domestic firms TMT Rebar. The roof of the state-of-the-art Delhi metro is made of steel and done by a collaboration between two industrial giants from Australia and India. Steel has been the go-to material for passenger safety for the Delhi Metro rail Corporation. In a bid to curb accidental falls on tracks, DMRC has resorted to install in barriers/railings at important metro stations. Till about a couple years ago, the metro experienced dozens of crippling disruptions caused by technical snags and resulted in pow3er failures. The frequent snags occurred because of the rusty copper pins used in the over shed electrification. The metro has now replaced them with stainless steel ones for improved safety and longevity.
(ii) As the government is promoting alternate energy options such as thermal power plants will directly influence steel industry as steel has been the boon for mankind with its multi-functional aspects and adaptability features. It would not be wrong to mention that the development of mankind could not have progressed without the help of steel in power plant generations. But what exactly makes steel the most adored alloy in power plants?
- Ability to form under hot and cold conditions
- Excellent weld ability
- Good machinability
- High strength
- Wear resistance
- Corrosion resistance to most of the process conditions
- Heat resistance
- Durability at high temperatures
Well, the list goes on and on.
So as long as the government is promoting alternate energy options the steel industry will keep on growing its importance in India as well as worldwide.
Keeping the above points in mind we can say that this year will be a great year for the manufacturers of the steel industry as the production rate will be high and to keep up with the deadlines of the projects and to manage the manufacturing process and to keep a look on the stocks and the raw materials the company will be in a state to have a software which will match to their requirements and have a specialization in steel industry that will be keeping up to the production and management accurately of the organization.
So, we can conclude that this will be a three dimensional development. The union budget only came into the favor of the infrastructure but the base of the infrastructure related development process will be directly linked to the steel industry and the better production and management will seek some requirements from IT industry too.
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