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India from the realization of "Iron Dream" how far?

Recently, foreign media reports that India's largest steelmaker, Kingdee Southwest Steel (JSW), plans to build two steel mills with an annual capacity of 10 million tons in Odisha and Jharkhand , The goal is to achieve 2030 years before the total capacity of crude steel more than 40 million tons. Obviously, the construction of these two steel mills is also part of JSW in response to India's "Iron Dream".

India's "Iron Dream" goes back to India's Prime Minister Moody's proposed steel revitalization program in 2015, and Moody's had shown that the steel production would exceed that of China at the fifty thousand steel workers' sworn meeting, and that one day would use India's steel aircraft carrier. Specifically, June 1, 2015, when the Indian Federal Minister of Iron and Steel and Minister of the Ministry of Mining, Thomas proposed that India will invest 2.94 trillion rupees in the next 10 years (equivalent to 46.1 billion US dollars) to boost the country's steel production capacity, And plans to 2025 years ago the country's annual production capacity of crude steel to about 300 million tons.

2 years later, India's "Iron Dream" to achieve how kind of it?

Steel "Great Leap Forward" is in full swing

Perhaps it is hard to realize that the goal of "reaching 300 million tons of capacity in 2025", which was put forward in 2015, is difficult to achieve. In February this year, the Federal Ministry of Iron and Steel and the Ministry of Mines made the "Iron Dream" deadline to achieve 300 million tons of crude steel production Of the target time adjusted to 2030, while the demand for per capita consumption of steel from the current 63 kg to 160 kg.

Despite the delay in achieving the target time, but India's steel expansion rate did not slow down. According to data released by the World Iron and Steel Association, crude steel production in India in 2016 reached 95.62 million tons, an increase of 7.4%, the highest growth in the world's top ten steel-producing countries. In the first quarter of this year, India's crude steel production reached 25.76 million tons, an increase of 2-digit - 10.7%, far more than Japan's 1.5% increase.

Many institutions predict that India's crude steel production this year is expected to exceed 100 million tons. In its latest issue of the Energy and Resources Quarterly Report, the Australian Department of Industry, Innovation and Science said that India's crude steel production will continue to grow strongly in the next two years, and it is even expected to become Japan's second largest in 2018 Producing steel country.

According to Bloomberg News, Sanak Mishra, secretary general of the Indian Iron and Steel Industry Association, said last month that India's steel production would grow 10% from a record high of 101.3 million tonnes in the past 12 months, 12%. "India's domestic steel mills are boosting production capacity to meet growing market demand and make up for the decline in steel imports in the country. By the end of 2017, India will surpass Japan as the world's second largest steel producer "He said.

In the past four months, six large steel companies, including JSW, the SAL and Essar, produced a total of 4.786 million tonnes of crude steel, an increase of 11 percent over the same period in 2016. Among them, JSW production is the highest, up 12% to 1.28 million tons; Tata steel production increased 19.7% to 906,000 tons, its new steel plant Kalinganagar (Kalinganagar) plant this fiscal year production is expected to further increase to 2 million tons; India Steel Administration (SAIL) production increased by 14% to 1.01 million tons, mainly due to the recent capacity expansion.

It can be seen that India's iron and steel enterprises are all increased horsepower to expand production. Of course, the Indian government's eyes not only in the production of iron and steel enterprises have been the head, but also accelerate the construction of new steel mills.

Earlier this year, the Indian government intends to promote the construction of an annual capacity of 6 million tonnes of steel mills in the Bastar region of the Indian Iron and Steel Authority and the Indian National Mining Development Corporation (NMDC) in Chattisgarh. In addition, according to "Hinduism" recently reported that the Indian government plans to use the public utility surplus land and private enterprises to establish a joint venture to further expand steel production capacity.

Steel demand "drag the legs"

Although the Indian government has implemented a series of ambitious infrastructure campaigns, including the construction of 30 million units of housing, the construction of roads, the improvement of rail systems, port facilities, but India's steel production growth and no corresponding demand to meet. India's crude steel production rose 8.7% in April, while steel demand was only 6 million tonnes, up 3.4% from a year earlier, according to data released by the Indian Iron and Steel Enterprises Association (JPC).

However, the Indian rating and research institutions continue to maintain a negative outlook for the steel industry, and pointed out that India's current crude steel production capacity of 122 million tons, due to weak demand, capacity utilization may be only 75%.

India Rating (India Rating) is expected this fiscal year, India's steel demand may still increase by 3% to 3.5%, the next fiscal year is expected to increase 4% to 5%. Recent non-monetary measures in India are likely to limit the development of the real estate industry, thus affecting the demand for steel for construction.

Driven by the increase in steel exports, steel production in India increased significantly from 2016 to 2017 (as of the end of March 2017), and steel mills are likely to further increase production when exports continue to rise. In April, India's steel exports rose 141% year on year to 747,000 tons. However, the export of strong can not make up for the sluggish domestic demand, most of the additional output had to become inventory. As of the end of April, India's steel inventories from the beginning of this year's 561 million tons rose to 6.43 million tons.

Associated with the Indian government's ambitious "300 million tons" program, Indian research institutions say that taking into account the current high debt of Indian iron and steel companies and India's low demand for domestic steel, such a huge investment funds is difficult to be guaranteed. The agency also pointed out that India is expected to reach 300 million tons of production capacity targets, from the current fiscal year to 2030, India's annual growth rate of steel consumption at least 8%, which means that during this period, India's GDP increased Speed ??to reach 10%, the difficulty of achieving this goal can be imagined.

"Demand stagnation in the past five years has affected the capacity utilization of the steel industry and has also exacerbated the debt situation of steel companies," said CRISIL, India's credit rating agency.

Of course, the Indian government is also trying to expand steel demand. According to foreign media reports, the Indian government this year has allocated a record $ 59 billion in funding for port, road, rail and electricity investment in construction projects, and in these projects using local steel.

Mishra said that India's domestic steel mills are increasing their capacity to meet growing market demand and make up for the decline in steel imports in the country. "India's steel production will continue to grow over the next few decades, as India is rapidly entering the urbanization phase," Mishra said.

At the same time, Mishra said that later this year, India will launch a new national product and service tax, which will further stimulate consumption.

Storm "positive", Anne "eager"

India's domestic steel demand growth continued to lower than the output growth, which makes India's domestic iron and steel enterprises in the expansion at the same time, operating pressure is also increasing. India's state-owned enterprises, including the Indian Iron and Steel Authority, and private steel companies represented by JSW, have repeatedly lobbied the government to raise the threshold for Indian steel imports.

In fact, India is gradually becoming the main sponsor of global trade protection. In 2016, the world's new iron and steel enterprises in China launched a total of 43 cases of trade, of which India ranked first in 7 (see Table 1). Since the beginning of last year, India has launched a number of anti-dumping investigations, mainly for China, South Korea, Japan and other countries imported to India's steel.

On the 11th of this month, the Indian Ministry of Finance decided to impose anti-dumping duties on hot rolled coils, hot rolled sheets and slabs imported from China, Japan, Korea, Brazil, Russia and Indonesia for a period of five years , And traced back to the date of the temporary anti-dumping duty on August 8, 2016. The decision also stipulates the lowest price of steel imports and is taxed at the difference between the import price and the lowest price. Among them, the hot-rolled coil lowest price of $ 478 / ton ~ 489 US dollars / ton, hot-rolled sheet and plate the lowest price of 561 US dollars / ton.

And this is India's implementation of this year at least for the fourth time for imports of steel trade protection measures. Since the beginning of this year, India has produced a number of countries from the alloy or non-alloy hot-rolled sheet products, cold-rolled coil products to impose different degrees of anti-dumping duties to extend the anti-dumping duties imposed on the relevant products, while imports of steel products Set the lowest price.

India's frequent implementation of trade protection measures for steel imports has caused dissatisfaction with the international community.

In January this year, the Japanese Ministry of Economy, Trade and Industry had publicly expressed dissatisfaction with India's trade protection of steel imports, and declared that India's actions were not in line with the WTO (World Trade Organization), if the negotiations can not resolve the dispute, Do not rule out the request for WTO intervention. At the same time, South Korean steel companies POSCO, Hyundai Steel and so on for India's imports of products "desperate to shut out" approach strongly protest.

The Indian government to vigorously implement the restrictions on imports of steel, making India's steel imports continue to decline, exports steadily increased. According to a report by the Indian steel sector, India's steel exports grew 142% in April, while imports fell by 23%, achieving net steel exports.

In addition to preventing steel imports, the Indian government is also actively creating demand for domestic steel companies in India. According to the Hindu newspaper, the Indian government intends to force domestic infrastructure projects to use domestic steel, the Indian government hopes to stimulate the consumption and production of Indian steel. Indian steelmakers seem to be confident that the Indian government is pushing for huge steel demand from urbanization, boosting production capacity and improving production efficiency

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