flat steel industry

Flat steel industry has traversed through difficult times and has been through many ups and downs in the past few months.

Steel 360 takes a sneak peek of how the Plate segment of Flat Steel Industry has performed amidst these tough times. In addition, how pipeline (the derivative of Plate), projects are going to fuel the growth of Flat Steel Industry.

Overview of Plate production

India’s domestic production of Steel plate was about 4 MnT in year FY13. India imported about 0.8 MnT and export was about 0.1 MnT hence, about 4.7 MnT of Plates were available for domestic consumption but 0.1 MnT of shortage remained.

Plates are mainly manufactured by primary players like SAIL, Essar and JSPL followed by some secondary players. SAIL holds a majority share followed by Essar and JSPL.

flat steel industry

Steel Plates are manufactured in various grades and dimensions which cater to a wide array of industrial requirements. These plates find diverse applications like, shipbuilding, construction of pressure vessels, boilers, Yellow goods manufacturing and line pipes.

One of the important uses of Plate is manufacturing of pipelines. These pipelines are often considered as ‘lifeline of an economy’ as they are used for transportation of oil, gas and water. India has seen a good growth in demand for specific grades of Steel plates used for manufacturing pipelines, owing to increasing Oil & Gas pipeline projects.

Where’s the Potential for Pipes

India is an emerging economy with lot of energy projects yet to be implemented. In 2011, India remained as the 4th largest consumer of Oil & Petroleum products in the world, followed by United States, China, and Japan. According to IHS reports, Crude oil pipeline network in India is less than 6,437 km with a gross capacity of 1.9 million BPD. It is expected that, demand for energy is going to shoot up in the coming years and the Oil & Gas industry might see a good pick up in investment for pipeline projects.

API Grade of Steel

These pipelines used in Oil & Gas industry is constructed from different grades of Steel plates of which API 5L pipeline is considered as a benchmark for manufacturing of Oil & Gas Pipeline projects. API 5L is a specific grade of steel certified by American Petroleum Institute for construction of pipelines. Many countries across the globe have relied on these high strength API grade steel for construction Oil & Gas pipeline projects. India has also accepted these global standards and a lot of pipeline projects in India are based on this special grade of steel.

Some of the well known pipeline projects in India have been constructed using API 5L. The East West Gas Pipeline (EWPL) which connects the states of Andhra Pradesh, Karnataka, Maharashtra and Gujarat. Other pipeline projects like Vijapur-Dadri Pipeline, Amod –Hazira product pipeline of IOCL are to name a few.

The import of API 5L has been nicely appreciated in the past few months owing to low availability in India.  Specific project requirements of Oil & Gas companies, has forced manufacturers of API pipelines to depend on imports.

flat steel industry

As per sources of EIA, majority of these pipeline projects are concentrated on the West Coast & Northwest coast of India as shown in the map below. Moreover many API pipeline manufacturers are based on West Coast of India mainly in Maharashtra and Gujarat. This makes imports of API 5L economically viable in western ports like Mundra, Kandla & Mumbai.