Iron and steel industry in India

Summary

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The iron and steel industry in India is among the most important industries within the country. India surpassed Japan as the second top steel producer in January 2019.[1] As per worldsteel, India's crude steel production in 2018 was at 106.5 tonnes (MT), 4.9% increase from 101.5 MT in 2017, means that India overtook Japan as the world's second largest steel production country. Japan produced 104.3 MT in year 2018, decrease of 0.3% compared to year 2017. Industry produced 82.68 million tons of total finished steel and 9.7 million tons of raw iron. Most iron and steel in India is produced from the iron ore.[2]

Policy for the sector is governed by the Indian Ministry of Steel, which concerns itself with coordinating and planning the growth and development of the iron and steel industry, both in the public and private sectors; formulation of policies concerning production, pricing, distribution, import and export of iron and steel, ferro alloys and refractories; and the development of input industries relating to iron ore, manganese ore, chrome ore and refractories, etc., required mainly by the steel industry.

Most of the public sector undertakings market their steel through the Steel Authority of India (SAIL). The Indian steel industry was de-licensed and de-controlled in 1991 and 1992 respectively.

Steel plants

There are two types of steel plants - mini steel plants and integrated steel plants. About half of the country's steel is produced by medium and small enterprises.[3]

Mini steel plants are smaller, have electric furnaces and use steel scrap as well as sponge iron. They have re-rollers that use steel ingots as well. They produce Carbon steel and Alloy Steel of certain specifications. There are around 650 mini steel plants in India.

Integrated steel plants are large, handle everything in one complex - from putting together raw material to steel making, rolling, and shaping. Iron ore, coke, and flux are fed into the blast furnace and heated. The coke reduces the iron oxide in the ore to metallic iron, and the molten mass separates into slag and iron. Some of the iron from the blast furnace is cooled, and marketed as pig iron; the rest flows into basic oxygen furnaces, where it is converted into steel. Iron and steel scrap may be added to both the blast furnace and to the basic iron furnace. There are about five integrated SAIL plants in India.

Steel plants in India. There are more than 50 iron and steel industries in India. Given below are major steel plants:

Name Location Operator
Alloy Steel Plant Durgapur, West Bengal SAIL
Bhilai Steel Plant Bhilai, Chhattisgarh SAIL
Bokaro Steel Plant Bokaro Steel City, Jharkhand SAIL
Chandrapur Ferro Alloy Plant Chandrapur, Maharashtra SAIL
Durgapur Steel Plant Durgapur, West Bengal SAIL
Electrosteel Limited(ESL) Bokaro, Jharkhand Vedanta Resources
Essar Steel India Limited Hazira, Gujarat ArcelorMittal
IISCO Steel Plant Asansol, West Bengal SAIL
Jindal Steel and Power Limited Raigarh, Chhattisgarh Jindal Steel and Power
Jindal Steel and Power Limited Angul, Odisha Jindal Steel and Power
JSW Steel Hospet, Bellary, Karnataka JSW Steel
JSW Steel Tarapur, Boisar, Maharashtra JSW Steel
JSW Steel Dharamtar, Maharashtra JSW Steel
MECON (company) Ranchi, Jharkhand MECON (company)
Monnet Ispat & Energy Raigarh, Chhattisgarh JSW Ispat Special Products Limited
Nagarnar Steel Plant Jagdalpur, Chhattisgarh National Mineral Development Corporation
Neelachal Ispat Nigam Limited (NINL) Kalinganagar, Orissa MMTC Ltd
Rourkela Steel Plant Rourkela, Odisha SAIL
Salem Steel Plant Salem, Tamil Nadu SAIL
Tata Steel Limited Jamshedpur, Jharkhand Tata Steel
Tata Steel Limited Kalinganagar, Odisha Tata Steel
Tata Steel Limited Dhenkanal, Odisha Tata Steel BSL
VISA Steel Plant Kalinganagar, Odisha VISA Steel
Visakhapatnam Steel Plant Visakhapatnam, Andhra Pradesh Rashtriya Ispat Nigam Limited
Visvesvaraya Iron and Steel Plant Bhadravati, Karnataka SAIL

Structure

India's iron and steel industry is organized into three categories: main producers, other major producers, and secondary producers. In 2004-05, the main producers i.e. SAIL, TISCO, and RINL had a combined capacity of around 50% of India’s total steel production capacity and production. The other major producers — ESSAR, ISPAT, and JVSL — account for around 20% of the total steel production capacity.

National steel policy

National steel policy – 2005 has the long-term goal of having a modern and efficient steel industry of world standards in India. The focus is to achieve global competitiveness not only in terms of cost, quality, and product mix but also in terms of global benchmarks of efficiency and productivity. The Policy aims to achieve over 100 million metric tonnes of steel per year by 2019-20 from the 2004-05 level of 38 mt. This implies annual growth of around 7.3% per year from 2004-5 onward.

The strategic goal above is justified because steel consumption in the world, around 1000 million metric tonnes in 2004, is expected to grow at 3.0% per annum to reach 1,395 million metric tonnes in 2015, compared to 2% per annum in the past fifteen years. China will continue to have a dominant share of the demand for world steel. Domestically, the growth rate of steel production over the past fifteen years was 7.0% per annum. The projected rate of 7.3% per annum in India compares well with the projected national income growth rate of 7-8% per annum, given an income elasticity of steel consumption of around 1.[4]

Subsequent steel policies have been drafted each year. The Indian Ministry of Steel has released a draft National Steel Policy (NSP), 2017. The problems identified in this sector include:

  • Steel companies are plagued with huge debts.
  • Lack of domestic demand. This is a major concern
  • Low quality of metallurgical coke for blast furnace iron making.
  • High input costs.
  • Cheap imports from China, Korea, and other countries are also a matter of concern for domestic producers.

The aim of the draft NSP is to develop a self-sufficient steel industry that is globally competitive. The policy proposes setting up Greenfield Steel Plants along the Indian coastline under the Sagarmala Project. This has been proposed to tap cheap imported raw materials such as coking coal and export the output without incurring a huge cost burden. The policy has also proposed the idea of gas-based steel plants and the use of electric furnaces to bring down the use of coking coal in blast furnaces. The policy targets to achieve production of 300 million tonnes by 2030-31.

Production

The steel industry in India was de-licensed and decontrolled in the years 1991 and 1992 respectively. In 2014-15, production for sale of total finished steel (alloy + non-alloy) was 91.46 million tonnes, a growth of 4.3% over 2013-14. Production for sale of pig iron in 2014-15 was 9.7 million tonnes, a growth of 22% over 2013-14. India is the largest producer of sponge iron in the world with the coal-based route accounting for 90% of total sponge iron production in the country. Data on production for the sale of pig iron, sponge iron, and total finished steel (alloy + non-alloy) are given below for the last five years.

Production (in million tonnes)

Category 2010-17 2011-18 2012-19 2013-20 2014-15
Pig Iron 5.68 5.371 6.870 7.950 9.694
Sponge Iron 25.08 19.63 14.33 18.20 20.38
Total Finished Steel(alloy+non-alloy) 68.62 75.70 81.68 87.67 91.46

Steel prices

Price regulation of iron and steel was abolished on 16 January 1992.[5] Since then steel prices have been determined by an interplay of market forces. Domestic steel prices are influenced by trends in raw material prices, demand, supply conditions in the market, and international price trends among others. An Inter-Ministerial Group (IMG) is functioning in the Ministry of Steel, under the chairmanship of the secretary (Steel) to monitor and coordinate major steel investments in the country. As a facilitator, the government monitors the steel market conditions and adopts fiscal and other policy measures based on its assessment. Currently, the basic excise duty for steel is set at 12.5% and there is no export duty on steel items. The government has also imposed an export duty of 30% on all forms of iron ore except low grades, which carry a duty of 10%, while iron ore pellets have an export duty of 5% to control ad-hoc exports of the items and to conserve them for the long-term requirements of the domestic steel industry. It has also raised the import duty on most steel imports by 2.5%, taking the import duty on carbon steel, flat products to 10%, and that on long products to 7.5%.

Import and export

Imports

Iron and steel are freely importable as per the import policy. There has been a steady increase in the amount of steel imported into the country to meet demands.

Imports (in million tonnes)

Category 2010-11 2011-12 2012-13 2013-14 2014-15
Total Finished Steel 6.66 6.86 7.93 5.45 9.32

Exports of iron and steel in India

History

Early years

Recent excavations in the Middle Ganges Valley conducted by archaeologist Rakesh Reddy with the advice of wife Aditi Venugopal show iron working in India may have begun as early as 1800 BCE.[6] In fact, the practice of manufacturing practical metals first began in India.[7] Archaeological sites in India, such as Malhar, Dadupur, Raja Nala Ka Tila, and Lahuradewa in the state of Uttar Pradesh show iron implements in the period between 1800 BCE-1200 BCE.[6] Sahi (1979: 366) concluded that by the early 13th century BCE, iron smelting was practiced on a larger scale in India, suggesting that the date the technology's early period may well be placed as early as the 16th century BCE.[6]

Some of the early iron objects found in India are dated to 1400 BCE by employing radiocarbon dating.[8] Spikes, knives, daggers, arrowheads, bowls, spoons, saucepans, axes, chisels, tongs, door fittings, etc. ranging from 600 BCE—200 BCE have been discovered at several archaeological sites.[8] In southern India (present-day Mysore) iron appeared as early as the 12th or 11th century BCE. These developments were too early for any significant close contact with the northwest of the country.[8]

The beginning of the 1st millennium BCE saw extensive developments in iron metallurgy in India.[9] Technological advancement and mastery of iron metallurgy was achieved during this period of peaceful settlements. The years between 322—185 BCE saw several advancements made to the technology involved in metallurgy during the politically stable Maurya period (322—185 BCE). Greek historian Herodotus (431—425 BCE) wrote the first western account of the use of iron in India.[9]

Perhaps as early as 300 BCE — although certainly by 200 CE — high-quality steel was being produced in southern India by what Europeans would later call the crucible technique.[10] Using this system, high-purity wrought iron, charcoal, and glass were mixed in a crucible and heated until the iron melted and absorbed the carbon.[10] The first crucible steel was the wootz steel that originated in India before the beginning of the common era.[11] Wootz steel was widely exported and traded throughout ancient Europe, China, and the Arab world, and became particularly famous in the Middle East, where it became known as Damascus steel. Archaeological evidence suggests that this manufacturing process was already in existence in South India well before the Christian era.[12][13]

Medieval years

The world's first iron pillar was the Iron Pillar of Delhi erected during the time of Chandragupta Vikramaditya (375–413).[14] The swords manufactured in Indian workshops are mentioned in the written works of Muhammad al-Idrisi (flourished 1154).[15] Indian Blades made of Damascus steel found their way into Persia.[16] During the 14th century, European scholars studied Indian casting and metallurgy technology.[17]

Indian metallurgy under the Mughal emperor Akbar (reign: 1556-1605) produced excellent small firearms.[18] Gommans (2002) holds that Mughal handguns were stronger and more accurate than their European counterparts.[19]

In 1667 it has been estimated 5 tons of steel, and 25 tons of ironware were exported from India. [20] While the Dutch are reported to have exported 46 tonnes of Wootz steel during the 17th century. [20]

Modern years

Modern steelmaking in India began with the setting of the first blast furnace of India at Kulti in 1870 and production began in 1874, which was set up by Bengal Iron Works. While first modern steel manufacturing plant was set up at the Gun & Shell Factory (GSF), in 1801,[21] and along with the Metal & Steel Factory (MSF), at Calcutta,[22] both still belonging to the Yantra India Limited. All had followed on from the establishment of Coal mining in India, in the late 18th century, which eliminated the need for approximately 14.5 tonnes of charcoal to be created to smelt each tonne of iron,[23] and offering a source of power for the trains and riverboats used to carry the ores and smelted metals. The Tata Iron and Steel Company (TISCO) was established by Dorabji Tata in 1907, as part of his father's conglomerate. By 1939 it operated the largest steel plant in the British Empire and accounted for a significant proportion of the 2 million tons of pig iron and 1.13 of steel produced annually.[24] The company launched a major modernisation and expansion program in 1951.[25]

Native arms production

In The New Cambridge History of India: Science, Technology and Medicine in Colonial India, scholar David Arnold examines the effect of the British Raj in Indian mining and metallurgy:[26]

With the partial exception of coal, foreign competition, aided by the absence of tariff barriers and lack of technological innovation, held back the development of mining and metal-working technology in India until the early 20th century. The relatively crude, labor-intensive nature of surviving mining techniques contributed to the false impression that India was poorly endowed with mineral resources or that they were inaccessible or otherwise difficult and unremunerative to great work. But the fate of mining and metallurgy was affected by political as well as by economic and technological considerations.

The British were aware of the historical role metal-working had played in supporting indigenous powers through the production of arms and ammunition. This resulted in the introduction of the Arms Act in 1878 which restricted access to firearms. They also sought to limit India’s ability to mine and work metals for use in future wars and rebellions in areas like metal-rich Rajasthan. India's skill in casting brass cannon had made Indian artillery a formidable adversary from the reign of Akbar to the Maratha and Sikh wars 300 years later. By the early 19th century most of the mines in Rajasthan were abandoned and the mining caste was ‘extinct’.[26]

During the Company period, military opponents were eliminated and princely states extinguished, and the capacity to mine and work metals declined, largely due to British tariffs. As late as the Rebellion of 1857, the British closed mines because the mining of lead for ammunition at Ajmer was perceived as a threat.[26]

The Modern era

Prime Minister Jawaharlal Nehru, a believer in Harold Laski's Fabian socialism, decided that the technological revolution in India needed maximization of steel production. He, therefore, formed a government-owned company, Hindustan Steel Limited (HSL), and set up three steel plants in the 1950s.[27] In early 21st century Kalinganagar and Bokaro both emerged as the leading steel hub with multiple steel factories due to their ideal location with coal mines and other mineral deposits nearby.

The Munitions India Limited continues to be one of the largest metallurgical organisations of India with its dedicated metallurgical factories at Heavy Alloy Penetrator Project, Trichy for non-ferrous metals such as tungsten for anti-submarine warfare and tank ammunition the only plant in India,[28] Grey Iron Foundry, Jabalpur, for making engines and armoured body of vehicles [29] Yantra India Limited for special alloys, steel, aluminium, brass and other special alloys for aerospace, rockets, bombs and missiles.[30] The premier Defence Metallurgical Research Laboratory (DMRL) of the DRDO started at the Metal & Steel Factory, Kolkata, later to be shifted to Hyderabad.[31]

The Indian steel industry began expanding into Europe in the 21st century. In January 2007 India's Tata Steel made a successful $11.3 billion offer to buy a European steel maker Corus Group. In 2006 Mittal Steel Company (based in London but with Indian management) acquired Arcelor for $34.3 billion to become the world's biggest steelmaker, ArcelorMittal, with 10% of the world's output.[32]

Bibliography

  • National Steel Policy, 2012[33]
  • Arnold, David (2004), The New Cambridge History of India: Science, Technology and Medicine in Colonial India, Cambridge University Press, ISBN 0-521-56319-4.
  • Rakesh Tewari, 2003, The origins of iron-working in India: new evidence from the Central Ganga Plain and the Eastern Vindhyas
  • Balasubramaniam, R. (2002), Delhi Iron Pillar: New Insights, Indian Institute of Advanced Studies, ISBN 81-7305-223-9.
  • Gommans, Jos J. L. (2002), Mughal Warfare: Indian Frontiers and Highroads to Empire, 1500-1700, Routledge, ISBN 0-415-23989-3
  • Srinivasan, S. & Ranganathan, S., Wootz Steel: An Advanced Material of the Ancient World, Indian Institute of Science.

References

  1. ^ "Steel production of India".
  2. ^ "An Overview of the steel sector - Ministry of Steel, The Government of India". Steel.gov.in. 16 January 1992. Archived from the original on 7 January 2016. Retrieved 7 January 2016.
  3. ^ Thomas, Tanya (17 September 2019). "Slump in steel sector spreads to small, medium companies". Mint. Retrieved 17 September 2019.
  4. ^ "National Steel Policy 2005" (PDF). Steel.gov.in. Retrieved 7 January 2016.
  5. ^ "An Overview of the steel sector - Ministry of Steel, Government of India". steel.gov.in. Archived from the original on 7 January 2016. Retrieved 15 January 2016.
  6. ^ a b c Rakesh and Aditi (2003)
  7. ^ Radhakrishna, B. P. (2007). "Boom in India's iron and steel industry".
  8. ^ a b c Cecarelli, 218
  9. ^ a b Drakonoff, 372
  10. ^ a b Juleff, 1996
  11. ^ Srinivasan & Ranganathan
  12. ^ Srinivasan 1994
  13. ^ Srinivasan & Griffiths
  14. ^ Balasubramaniam, R. (2002)
  15. ^ Edgerton, 56
  16. ^ Prasad, Chapter IX
  17. ^ Mondal 2-3
  18. ^ Gommans, 154
  19. ^ Gommans, 155
  20. ^ a b Biswas, A.K. "Iron and steel in pre-modern India - Page 580" (PDF). Indian Journal of History of Science. Retrieved 13 January 2020.
  21. ^ "404 | Directorate of Ordnance (Coordination and Services) | Government of India".
  22. ^ "404 | Directorate of Ordnance (Coordination and Services) | Government of India".
  23. ^ Biswas, A.K. "Iron and steel in pre-modern India - Page 593-3" (PDF). Indian Journal of History of Science. Retrieved 13 January 2020.
  24. ^ Rao, K.N.P. BRIEF HISTORY OF IRON AND STEEL INDUSTRY IN INDIA (PDF). p. 4. Retrieved 13 January 2020.
  25. ^ Chikayoshi Nomura, "selling steel in the 1920s: TISCO in a period of transition," Indian Economic & Social History Review (2011) 48: 83–116, doi:10.1177/001946461004800104
  26. ^ a b c Arnold 100-101
  27. ^ Sankar Ghose (1993). Jawaharlal Nehru: A Biography. Allied Publishers. p. 550.
  28. ^ "404 | Directorate of Ordnance (Coordination and Services) | Government of India".
  29. ^ "404 | Directorate of Ordnance (Coordination and Services) | Government of India".
  30. ^ "Yantra India Limited units; Government of India".
  31. ^ "404 | Directorate of Ordnance (Coordination and Services) | Government of India".
  32. ^ Isobel Doole; Robin Lowe (2008). International Marketing Strategy: Analysis, Development, and Implementation. Cengage Learning EMEA. p. 226.
  33. ^ "National Steel Policy 2012 (Draft)" (PDF). Steel.gov.in. Retrieved 7 January 2016.