2018 saw a slow down for most of the industry growth but iron and steel industry was able to maintain steady pace even after global trade issues and China’s close down of its polluted steel industry. Steel360 rewinds 2018 major events of the Indian and the global steel industry.
The beginning of the year observed some game changing decisions given by the top court of India-
- Granting a major relief to steel and mining industry, the apex court of India increased the capacity of production of iron ore from 30 million tonnes per annum (mtpa) to 35 mtpa for the ‘A’ and ‘B’ category mines in Karnataka.
- The top court gave a major blow to Odisha miners declining deadline extension for depositing the penalty that it had imposed on mining lease holders for operating without the necessary clearances in Odisha.
- The Odisha government on 1st January suspended operations in seven mines (extracting iron and manganese ores) that failed to pay penalties by deadline.
- Steel Industry had high hopes from Union Budget 2018 but their expectations were hardly met when it was pronounced. Instead the budget largely overlooked the key demand to reduce customs duty on melting scrap and coking coal to nil from present level of 2.5%.
- The budget pronounced massive investments estimated to be in excess of 50 lakh crore in infrastructure to increase growth of GDP, connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways and to provide good quality services to our people.
- Government introduced 20% Tariff rate on export duty on electrodes used for furnaces. However the current export duty on such electrodes continues to remain zero.
- All mining activity in Goa, involving iron ore extraction, came to a halt after the Supreme Court’s order cancelling 88 iron ore mining leases in the State that were renewed by the government in 2014-2015 just before the Mines and Minerals (Regulation and Development) Act mandated the auction of leases.
- Goa had permissible mining capacity of 20 million tonnes per year and Vedanta’s share in the total output was 5.5 million tonnes.
- Starting from mid February, major miners of including Idcol, Serajuddin and Essel Mining restarted mining after receiving nod from the top court as their delayed payments were accepted.
- The announcement of implementation of 25 % tax on steel import and 10 % tax of aluminum by US President Donald Trump which later resulted in counter actions from China triggering a trade war was one of the biggest news of 2018.
- “Heavy tariffs on imported steel and aluminium would not have any major impact on steel production in India as steel export to US was only 3.3% of total exports, but in can indirectly affect the domestic sector” the statement of Union Steel Minister.
- Tata Steel took control of Bhushan Steel settling about INR 35,200 crore, or nearly two-thirds, of the loans the bankrupt steelmaker owed to lenders. Bhushan Steel become first to emerge successful from insolvency and bankruptcy process among the initial dozen big defaulters that the central bank referred for resolution under a law enacted for quick recovery and settlement of stressed assets.
- JSW Steel acquired Italy’s second-largest steel plant Aferpi from the Algerian Cevital for INR 441 crore in a move that gave the company a foothold in the European market.
- For CY17, Arcelor Mittal continues to remain the top steel maker with tonnage of 97.03 mnt, followed by China Baowu group with tonnage of 65.39 mnt in CY17.
- After implementing steep tariffs on steel and aluminum Trump government also initiated implementing same section 232 of trade expansion act into US import of automobiles and automotive parts.
- Indian pellet export price assessment moves up sharply in FY18. In the first week 2018 prices were around INR 7,100-7,300 per ton and it skyrocketed afterwards.
- Vedanta acquired management control of debt-laden Electrosteel Steels Ltd after paying INR 5,320 crore in an escrow account. After successful resolution applicant by the committee of creditors (CoC) for Electrosteel Steels Ltd under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code, 2016.
- Breaking the monopoly of sole supplier of rails, Jindal Steel and Power Ltd (JSPL) became the first private steel player to bag an order for supplying about one lakh tonne of long rails to the national railroad carrier.
- In August, Directorate General of Trade Remedies (DGTR) initiated probe into alleged dumping of a certain type of steel imported from Brazil, China and Germany on the complaint filed by Graphite India Ltd.
- JSW Steel and its promoters acquired around 88 percent stake in the Monnet Ispat and Energy Ltd (MIEL) following completion of the insolvency resolution proceedings (total acquisition amount around INR 2,875 crore).
- Union Ministry of Steel for the first time gave away Secondary Steel sector awards to 26 mini steel companies in recognition of their contribution to the national economy. 12 companies were awarded Gold Certificates and 14 Silver Certificates for their performance during 2016-17.
- Indian Pellet broke all past record reaching all time high , pellet prices reached six year high (at INR 9,933.33 per ton ex- Raipur, Ex-Durgapur at INR 8,833.33 per ton).
- Implementation of Vehicle scrappage policy in India can be expected by 2020, according to chairman of SIAM (Society of Indian Automobile Manufacturers).
- To acquire Essar Steel, ArcelorMittal agreed to pay a total of INR 50,000 crore, including INR 8000-crore capital infusion as bankers started voting on its offer.
- SAIL’s flagship unit Bhilai Steel Plant also witnessed one of the biggest industrial accidents. Workers death toll reached 14 and grievously injured 9.
- NMDC Limited has suspended iron ore-mining from its Donimalai mine in Karnataka following the decision of the State government to impose 80 per cent premium on the iron ore sales from the mine.
- In response to the complaints received from various countries, the WTO (World Trade Organisation) has agreed to set up panels at its Dispute Settlement Body (DSB) to decide whether U.S. tariffs on steel and aluminium imports comply with WTO rules.
- Throughout the year, most metal share prices saw a significant downfall. One of the few reasons being global slowdown due to trade war and probable depreciation of rupee.
- Logistics is another crucial challenge for steel industry especially the non availability of railway rakes which is yet to be redressed.
To read more such stories,Subscribe to Steel360