India steel output up, but only just | business | Hindustan Times
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India steel output up, but only just

business Updated: Jul 21, 2010 22:43 IST
Sumant Banerji

While the country managed to avoid being hit by the global slowdown, the growth in its steel production in the first six months of 2010-11 is a pale shadow of the performance of the world leaders.

India did manage to retain its No 5 position, but it was the only country with over 10 million-tonne capacity with a single-digit growth rate. All others including China, Japan, Korea, the US, Russia, Brazil and Germany grew much faster.

With land acquisition problems dogging almost every big project, the growth rate for India’s steel-production is expected to remain in single-digits for the rest of the year.

“The problems that steel companies are facing to initiate greenfield capacity expansions due to land acquistion constraints and delayed mining approvals will lead to a widening supply deficit,” said a Tata Steel spokesperson. “It is essential to set up large new steelmaking capacities in the country. These issues need urgent attention of the government, whose intervention is required to facilitate setting up new steel capacity.”

This is a complete reversal of situations for India, which had climbed up to the third rank ahead of the US and Russia in the first half of 2009.

That however was largely on account of plant shut-downs in other economies in the aftermath of the global meltdown, than any real growth in India’s production. For the full year of 2009, the country’s output grew by a mere 2.7 per cent — but it was the only country apart from China to have logged growth.

Globally steel production grew 27.9 per cent in January-June, with all regions reflecting growth. But only Asia and West Asia are producing more steel compared to 2007 (before the slowdown). Europe, US and Canada are still more than 15 per cent below 2007 levels.