CONTENTS

WORLD VIEW

TECHNOLOGY

INDUSTRY

INTERVISTA

NOTES FROM BANGLADESH

EXPERTALK

IRON ORE UPDATE

MMDR Act Changes to Make Steel Costlier

‘Scrappage Policy a Cog in Steel Recycling Wheel’

Berth Pangs: Long Wait for Scrap at Chattogram Port

Price Rally Seen inGlobal, Domestic Markets

Steel Price Rally:For How Long?

Alloy Steel Makers Look to Ride Auto Sector Growth

Steel Capacity Expansionin 5 States Under Way

Global Steel Demand May Cross 1,900 MnT for 1st Time in 2022

Tenova Turns New Leaf inEAF Technology

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COVER STORY

Vivek N Nath Section Head, Raw Materials, AM/NS India

BY NIRMALYA DEB

COVER STORY

With the administration lifting restrictions on re-bar supply by the secondary producers, since it wants to diversify supply sources, the stage is set for induction furnace (IF) mills to supply steel for

government projects

Governments across the world follow a very straightforward model when it comes to boosting steel demand after a long stretch of demand dearth: and that involves increasing spending in infrastructure projects. With the Covid pandemic raging

across the country and extending its ominous shadow over the Indian economy, the last resort happens to be the government’s increased budgetary allocation for steel-intensive infrastructure – not unlike in China – in order to drive economic growth. In a bid to keep prices in check and diversify supply sources, the government has lifted restrictions as regards sourcing of steel for infrastructure projects. In a significant development, the government is diversifying sources of steel supply for infrastructure and road and highway projects by breaking with the established practice of buying steel exclusively from the primary producers, thereby opening a window for the secondary steel sector in the country to participate in such tenders. The Ministry of Road Transport & Highways (MoRTH) has notified that “it has been decided to allow steel produced from ore/billets/pellet/melting of scrap” for government-funded road, flyover and highway projects. “For plain and reinforced cement concrete (PCC and RCC) or pre-stressed concrete (PSC) works, the reinforcement/unmentioned steel... shall consist of mild steel (MS) Grade-I (conforming to IS:432) and High Strength Deformed Steel (HSD) conforming to IS:1786),” the MoRTH notification states.

Much-needed Clarification by MoS

The Ministry of Steel (MoS) had earlier underlined certain discriminatory guidelines laid down by both the Central Public Works Department (CPWD) and MoRTH related to purchase of thermo mechanically treated (TMT) steel bars (IS:1786) for government projects. The Ministry of Steel (MoS) had dashed off a letter to MoRTH, highlighting the grievances of small and medium steel producers about discrimination in steel purchases for government projects. The letter dated January 12, 2021, a copy of which is with Steel360, underlined certain discriminatory guidelines

laid down earlier by both the Central Public Works Department (CPWD) and MoRTH related to purchase of thermo mechanically treated (TMT) steel bars (IS:1786) for government projects. Earlier notifications issued by the CPWD and MoRTH stipulated that only BF-BOF, COREX-BOF and/or DRI-EAF producers who produced steel through the virgin iron ore route would be eligible to supply reinforcement bars. Vide a circular in December, 2020, MoRTH had mandated that secondary steel producers would be eligible to supply rebars for roads and highways provided they were rolled from billets (IS:2830) produced “directly from iron ore and not from shredded scrap and sponge iron as basic feedstock”. Likewise, the CPWD had mandated in December, 2019 that the EAF capacity of producers should be at least 100 tonnes (MT) or more for them to be eligible to participate in government procurement processes. Against this backdrop, recent clarifications issued by the MoS are as under: a) Routes of steel production have no bearing on the quality of steel produced; b) Use of scrap/DRI instead of iron ore does in no way affect quality provided the products manufactured conform to BIS standards that have been made mandatory for most steel products through successive Steel Quality Control Orders issued by MoS; c) Scrap, DRI usage should be encouraged as an eco-friendly alternative to sintering and coking coal integral to the BF-BOF route; d) MoS abolished the distinction between primary and secondary steel producers through an order issued in August, 2016; and e) Size of the furnace doesn’t determine the quality of steel products. End-users in the infrastructure and construction sectors should get quality concerns addressed by insisting on BIS norms that specify all chemical and physical requirements for TMT bars much like other steel products. However, Steel360 was keen to travel beyond government notifications in order to study the possibility, or otherwise, of secondary steel-makers in India supplying steel for government projects. It was necessary, in some cases, to appreciate the fact that quality concerns were simmering under the surface. The focus was to gauge whether secondary

C R O S S I N G T H E BA RCOVER STORY

by MADHUMITA MOOKERJIIndustry

Alloy Steel Makers Look to Ride Auto Sector Growth

The recent spurt in two-wheeler, lighter passenger vehicles (PVs) and tractors sales spelt good news for the alloy

steel producers in India. However, the catastrophic second wave of Covid-19 may change the scenario a bit, with localised lockdowns impacting auto sales at this juncture.

Covid-19 is likely to deal a blow to auto sales once again and, at present, the market buzz is that there is a risk involved in the negotiations. With auto sales impacted, because of the localised lockdowns, the negotiations may get delayed, it is felt. However, the upside is that these are short-term and a national lockdown will only be the last resort, as per the Prime Minister’s recent speech. Alloy steel producers across India, such as JSW Steel, Mukand Ltd, Kalyani Steel, Sunflag, Vardhaman etc are bracing for a price increase by INR 6,000-INR 8,000 per tonne for original equipment manufacturers (OEMs) and component makers in the auto sector under their long-term contracts. The price hike, as mentioned above, however, pertains only to long alloy steels...

by NIRMALYA DEBTechnology by SHUBHAM RAI Intervista

Time for reflection: Second wave of pandemic may impact auto sector. Source: iStock

Tenova Turns New Leaf in

EAF Technology  Technology giant is offering a range of digital solutions for EAF steel-makers

Advanced process control and enhancement of productivity

are key concerns for steel-makers, along with energy efficiency. Leading technology solutions provider Tenova’s ‘Intelligent EAF (i EAF®)’ technology platform incorporates many streams. The innovative and patented NextGen® off-gas analysis hardware and sensors provide actual measurements in critical process areas and help avoid control errors and inaccuracies that can result when using estimates and

assumptions. Full spectrum off-gas composition and off-gas flow, temperature and pressure sensors provide valuable real-time information necessary for effective EAF water detection and for closing a real time EAF mass and energy (M&E) balance. The proprietary i EAF® software has been designed to provide both performance benefits from reduced energy and increased productivity plus provide low false alarm rate water detection effective in both oxidising and reducing

EAF operations. The i EAF® Service and Support Program now includes a breakthrough Industry 4.0 cloud-based computing programme for continuous system monitoring, dynamic model retuning and continuous improvement.

Technology Platform

Armando Vazquez, Senior Business Developer Manager, Tenova Goodfellow Inc. Toronto, Canada, highlighted the many benefits of the platform for EAF steel producers in a recent...

Tenova Consteel® EAF at JSW Mingo Junction, US Source: Tenova

‘Scrappage Policy a Cog in Steel Recycling Wheel’

The recently-announced Voluntary Vehicle Scrappage Policy will serve several purposes. It will remove older and polluting vehicles from the road and make way for new ones fitted with more advance technologies that would lower emission levels. The automobile industry would get a leg-up too. There would be more raw material

feed available for the secondary steel sector. Scrap imports will reduce, saving precious foreign exchange. The steel produced through the recycling route entails significantly lower carbon emissions, resource consumption and energy utilisation, says Yogesh Bedi, Chief, Steel Recycling Business, Tata Steel and an industry veteran with over 30 years of experience. The first of the many envisaged plants of this business has been set up at Rohtak, Haryana. This initiative of Tata Steel is a disruptor of sorts and is likely to change the way scrap is bought and sold in India, Bedi further adds. Excerpts from an 

interview:

Q. What are the far-reaching implications of the vehicle scrappage policy and Green tax for the steel industry?

A. The government recently gave the green signal to two path-breaking ‘green’ policies. The first is the Voluntary

Vehicle Scrappage Policy, announced in the Budget for financial year 2021-22 (FY22). The second

relates to the ‘green’ tax for older vehicles, announced by the Ministry of Road Transport

and Highways (MoRTH). While most advanced countries have similar policies

in place, it is a timely step for a developing country like India.

Both policies are progressive and futuristic, with far-reach...

Price RiseEven as negotiations are underway between alloy steel producers and original auto equipment manufacturers (OEMs) and auto component makers, most of the auto dealerships are closed at present because of the lockdown in major cities and towns. The catastrophic second wave of

ExperTalk by VIVEK N NATH by SHUBHAM RAIWorld View

MMDR Act Changes to Make Steel CostlierCost of finished steel may rise INR 4,000/tonne, especially for mills sourcing iron ore from govt miners; infra, auto to be impacted

The Government of India, under its Gazette notification no.1296 dated March 28, 2021, notified the Amendment Act, 2021 to the Mines and Minerals (Development and Regulation) Act (MMDR Act), 2015, adding Schedule V and VI:

“All such government companies or corporations whose mining lease has been extended after the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2015, shall also pay such additional amount as specified in the Fifth Schedule for the mineral produced after the commencement of the Mines and Minerals (Development and Regulation) Amendment Act, 2021.” After the Fourth Schedule to the principal Act, the following Schedules shall be inserted, namely, The Fifth Schedule [See Sections 8(4), 8A(8) and 17A(2C)] and The Sixth Schedule [See Sections 8(5) and 8A(7A)] for non-auctioned captive mines (other than coal and lignite).

Explanation: For the purposes of this Schedule, the additional amount shall be in addition to the royalty or payment to the District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET) or any other statutory payment.

Additional amount on grant orextension of mining lease

Equivalent to 150% of the royaltypayable

Equivalent to 50% of theroyalty payable

Equivalent to the royalty payable

Equivalent to the royalty payable

The Fifth Schedule

Mineral

Iron ore and chromite

Copper

Coal and lignite

Other minerals (otherthan coal and lignite)

Table 2 | Source: Author

The amendment comes against the backdrop of: The National Steel Policy, 2017 goals of achieving 300 million tonnes (MnT) of steel capacity by 2030; The National Mineral Policy goals to increase mineral production by 200% in seven years; and A decision by the

government in September 2019 to allow state-run Steel Authority of India (SAIL) to sell 25% of its iron ore produced from captive mines and dispose of old stocks of 162 MnT of low-grade iron ore lying at mine heads across the country. SAIL has auctioned around 4.7 MnT of iron ore fines between May, 2020 and March 2021. As per SAIL, the company is augmenting cash flows through auctions of its iron ore and fines. Notably, iron ore dumps and tailings form a chunk of the total fines sales at its periodic auctions...

Global Steel Demand May Cross 1,900 MnT For 1st Time in 2022

The World Steel Association (worldsteel), after reporting a contraction of -0.2% in global steel demand in 2020 to 1,771.8 million tonnes (MnT)

due to the Covid-19 pandemic, has now forecast in its Short Range Outlook (SRO) that steel demand will grow by 5.8% in 2021 to reach 1,874 MnT. It may be recalled that the apex body, in its June 2020 SRO, had forecasted that

using countries. For the year 2022, as per the new projected numbers, global steel demand is expected to cross the 1,900-MnT mark for the first time in the history of WSA, reaching 1,924.6 MnT, an increase of 2.7% over 2021 which is a ray of hope for global steel makers. Brussels, Belgium-based World Steel Association is the largest international trade body for the iron and steel industry. The

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500

1000

1500

2000

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2015 2016 2017 2018 2019 2020 2021 (f) 2022 (f)

World Demand for Finished Steel ProductsSteel Demand Growth Rates Y-o-Y in %

All above figures are rounded off | Source: WSAQuantity in MnT | f - forecast

world steel demand in 2021 would reach 1,717 MnT. Later, in its SRO in October 2020, the numbers were revised with WSA saying that finished steel demand would reach around 1,795.1MnT in 2021.

Presenting its April SRO, 2021, the largest steel body said that the current forecast assumes that the ongoing second or third waves of infections will stabilise in the second quarter and that steady progress on vaccinations will be made, allowing a gradual return to normalcy in major steel-

association represents steel producers, national and regional steel industry associations and steel research institutes. Its members represent around 85% of global steel production.

Outlook in Developed Economies

After the free-fall in economic activity in the second quarter of 2020, the

industry generally rebounded quickly in the third quarter, largely due to the substantial fiscal stimulus measures and unleashing of pent-up demand. However, activity still remained below the pre-pandemic level at the end of 2020. As a result, the developed world’s steel demand recorded a double-digit decline of 12.7% in 2020. “We will see substantial recovery in 2021 and 2022, with growth of 8.2% and 4.2% respectively. However, steel demand in 2022 will still fall short of 2019 levels,” the SRO report said...

by MADHUMITA MOOKERJIIndustry

Steel Price Rally: For How Long?

India’s primary steelmakers are on a roll thanks to a continuous northward movement in prices in the domestic market amidst burgeoning demand, dearer imports of the material

and a huge unfolding opportunity to export more, thanks to a deliberate production cut in China. And, the most fascinating part of the entire story is that the present dream run is

set to continue for a very long time only if the second wave of the deadly coronavirus does not play spoilsport.

China Production CutsDuring the early days of the pandemic, while the whole world was struggling to decipher the next set of moves, China was producing more and more steel. In 2020, China increased its share in world steel production to 56.5% from 53.3% a year earlier. Its total production was 1,053 million tonnes (MnT), up by 5.2% over 2019. Barring Russia, all the other three major steel producing nations – India, the US and Japan – among the top five, reported production declines ranging from 10.6% to

17.2%. Overall, steel production was down by around 1% in 2020. Again, when others are trying to restore the pre-Covid level of production, China is pruning its output to reduce its carbon footprint. On March 19, Tangshan’s local government issued a notice calling upon 23 of 25 steelmakers to slash emissions by 30–50% by December, 2021 following an investigation by the environment ministry which revealed that some steel companies had failed to adopt emergency pollution

Month FinishedFlats

FinishedLongs

Total

April 0.45 0.02 0.47

May 1.22 0.11 1.33

June 1.45 0.14 1.59

July 1.34 0.13 1.47

August 1.08 0.09 1.17

September 0.79 0.11 0.90

October 0.53 0.07 0.60

November 0.59 0.06 0.66

December 0.61 0.09 0.69

January 0.53 0.08 0.60

February 0.55 0.08 0.63

March 1.27 0.28 1.55

Total 10.39 1.26 11.65

India's Finished Steel Exports in FY21

P- Provisional figures | Quantity in MnT | Source: SteelMint

measures. Various reports suggest that, as a result, production in China will be cut by around 20-25 MnT in the current year, the bulk of which is expected to be in the form of reduced exports. The talks of the local Chinese government on reducing the export tax rebate from 13% to nil on hot rolled coils (HRCs) and rebar and 4% on CRC are also for real.

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COVER STORY Flashback

E-Magazine INR 5,000

YEARLY SUBSCRIPTION PLANS (12 ISSUES)

Auctions:Apr 2021 |Issue 10

PandemicLessons

June 2020 |Issue 12

Coal FeelsThe Heat

May 2020 |Issue 11

RINLSets ‘Realistic’

July 2020 |Issue 1

IRON (C)oreCONCERNS

Aug 2020 |Issue 2

Induction Innovation

Oct 2020 |Issue 4

‘India's SteelDream Still Intact’

Sept 2020 |Issue 3

ScrapNotes

Nov 2020 |Issue 5

The YearThat Was

Dec 2020 |Issue 6

Fast Forwardto 2021

Jan 2021 |Issue 7

Electrotherm:

Mar 2021 |Issue 9

A Mine ofOpportunities?

Acting Pricey!

Feb 2021 |Issue 8