India is the world’s second largest manufacturer of crude steel followed by China. It is also one of the biggest importers of steel in the world, shipping more than three thousand units of steel a year. It is not surprising then that Indian steel manufacturers are growing at breakneck speed in a time when demand for goods and services is soaring. Steel is not just being manufactured in India – it is also exported to countries such as China, Pakistan, Russia, Taiwan and other East Asian nations.
The need for more raw material has forced steel producers to expand into markets that were previously inaccessible. For example, steel producers are now looking to expand their business interests beyond India’s borders. In response to this, they have invested billions of dollars in projects aimed at increasing crude steel output capacity. India’s economy can also look to lift itself out of the quagmire of an economic slump that has gripped it over the past decade or so. New investment opportunities, coupled with new approaches to dealing with the current glut of excess capacity, will give steel producers a chance to secure more shipments from the global market.
For years, steel producers in India have focused on meeting the domestic demand for finished products by making capacity limits and restructuring production plants. However, as the global economic downturn hit the global economy, producers have had to rethink their strategies. They now see the opportunity in ramping up production to meet the demands from developing nations. In fact, according to the Association of American Feed Chemicals and Biochemistry (AAFCO), a recent study showed that there was an increased interest by Indian steel producers to buy steel from abroad. Between July and October of last year, Indian steel producers made a procurement worth Rs 3.5 billion dollars sun onsen village limited edition.
Steel manufacturers are buying capacities from countries such as Malaysia, Taiwan, Thailand, Philippines and Vietnam. Capacity limit agreements are in place between Indian and foreign suppliers to ensure consistent supply of raw materials. An increase in shipments of crude steel production in Asia is expected due to the impending closure of the Kolkata Power Station. The renewed focus on Indian investments in infrastructure is expected to drive greater investments by international steel companies.
A recent statement by Prime Minister Manmohan Singh on boosting the exports of Indian crude steel to abroad indicated that the government will seek to boost the exports by pursuing various options. “There is no scope for India to export at less than what it uses,” Singh told an audience in Singapore. The PM’s comments come on the heels of the recent spat between Singapore and Pakistan over the latter’s refusal to allow oil tankers to dock at Singapore’s port. On the same day, the Indian government announced an additional $1 billion for projects pertaining to petroleum projects in Baluchistan and China.
The PM’s remarks came just ahead of the first shipment of iron ore from Japan for the first time in nearly two decades. With both China and India are buying far more crude steel than the United States and other world powers, Japan is exploring ways to increase its share of the global market. With India’s rise to be the largest steel importer in the world, Japan is trying everything possible to ensure that it gains a larger slice of the Indian market.