Indian steelmaker Tata Steel hopes the government will remove exports duties on steel, as the country should become a major steel exporter in the medium-long term.
"While we fully understand the compulsions of bringing that [export tax] in to put a cap on steel prices and to manage inflation, but in the medium to long term, our submission to the government has been India should be a big exporter of steel," Tata chief executive officer and managing director TV Narendran said.
India can export 50mn-100mn t/yr of steel, as it produces more steel than Japan and South Korea, which export 30mn-40mn t/yr, Narendran said. India produced 118.1mnt of steel last year, only lower than China's 1.06bn t. Japan produced 83.2mn t and South Korea 70.6mn t.
India has iron ore deposits and it needs to create jobs, so it should raise steel production capacity targeting export markets in addition to the domestic market, Narendran said. "The government is kind of supportive of our view," he said. "The question is when will they remove the export duties, and we hope it will happen sooner than later."
India's finished steel exports hit a 1½-year low in June, while consumption and production fell to their lowest in six months because of export duties.
The steelmaker said steel prices were close to the bottom, as Indian auto sector demand has returned and construction projects put on hold because of high prices will resume after the monsoon season, causing buyers to restock inventories.
Tata Steel expects to sell more volumes in the July-September quarter than it sold in the preceding three months.
The company sees margins continuing under pressure until October-December, but expects to perform better during the second half of the fiscal year from October-March 2023.
The steelmaker sees average coking coal consumption cost dropping by $40/t as cheaper coal will begin to flow through in September. But higher thermal coal costs will keep long steel prices firm, the company said.
Net zero and expansion targets
Tata Steel expects to achieve net zero emissions by 2045 by steadily increasing scrap usage in steelmaking, using solar energy for mining activity and deploying electric vehicles for short distance transportation of materials.
The company's 6mn t/yr pellet plant in Kalinganagar in Odisha state will be commissioned in the next three months. This will help improve the agglomerate mix in the blast furnace, lower coke rates and subsequently cut costs by 0.5bn-1bn rupees ($6.3mn-12.5mn). The cold rolling mill at the facility will be commissioned by the end of the year. Meanwhile, the recently-acquired Neelachal Ispat plant's blast furnaces will begin operations in the next three months. Rated capacity at the furnaces will be ramped up to 100,000 t/month by March 2023, Tata Steel said.
Tata Steel's immediate focus is on expanding the capacity of the Kalinganagar plant from 3mn t/yr to 8mn t/yr, and then to 13mn t/yr depending on market conditions. The steelmaker also plans to raise capacity at the Neelanchal Ispat plant from 1mn t/yr to 5mn t/yr, and at the Bhushan Steel and Power plant from 5mn t/yr to 6.5mn-7.5mn t/yr, and eventually to 10mn t/yr.
