Indian steelmakers will not rely on exports, focusing more on satisfying growing domestic demand in the coming years driven by infrastructure investment. The majority of their capacity will not be converted to low emissions but a small tonnage will be in order to continue supplying the EU once CBAM is implemented, says Jindal Steel vice chairman advisory board VR Sharma.
For Jindal Steel itself, which rebranded from Jindal Steel & Power this week, the firm is “not interested in producing steel in India for Europe”, Sharma said at Kallanish Europe Steel Markets in Amsterdam on Tuesday. Whatever steel it supplies to Europe will come from within Europe itself or the Middle East.
The firm is constructing a low-emission steelworks in Oman, under its Vulcan Green Steel brand, which will supply to Europe, among other destinations. It also recently acquired Czech plate mill Vitkovice Steel, where it plans to install an electric arc furnace to produce up to 1.5 million tonnes/year of slab using the plentiful scrap feedstock available domestically and in neighbouring countries.
Jindal Steel’s strategy is to maintain its existing blast furnace-basic oxygen furnace plants and reduce CO2 emissions wherever possible, but to simultaneously also install new DRI-EAF facilities. In India, the firm already has one DRI plant and has now added a second, based partly on green hydrogen and partly on recovered coke oven gas, he added.
Asked why foreign companies would invest in the EU, Sharma provided a damning conclusion. “It is very difficult for any investor to come into Europe and take charge of 50-60 year old plants. These plants are scrap, I’m, sorry to say, but these plants are no good,” he observed. “It’s better to put small plants in Europe, especially eastern Europe. The next happening places will be Hungary, Czech Republic, Poland and Romania.”
As for the Indian market, the 12% safeguard duty is “a fairly good amount of duty and, personally, I don’t expect more than that,” Sharma noted, adding that Indian downstream manufacturers also need to be accounted for. The current Indian market price decline is more of a correction as input costs have gone down. Flat steel is “feeling the heat” due to oversupply while longs are faring better, he added.
Indian steel demand is increasing by 10% each year amid the country’s nation building phase, and steelmakers will target this demand rather than exports, he concluded.
Adam Smith Poland
