India: Steel mills forge ahead with expansion plans

With Covid-19 infections showing a decline, it is hoped lockdowns will start easing soon. This optimistic scenario will offer room to the primary mills to resume their capacity expansion programmes, dovetailing with the National Steel Policy of 300 million tonnes (mn t) of crude steel capacity by 2030-31. Of course, this target may not be reached within this deadline. But primary producers like SAIL, JSW Steel, Jindal Steel & Power and Tata Steel have all indicated they are forging ahead with their expansion full steam while AM/NS India has begun a feasibility study on its greenfield plant in Odisha.

JSW Steel

JSW Steel, as per data maintained with SteelMint, will see a capacity expansion from the present total 21 mntpa to 34.72 mntpa by FY ’24, an increase of almost 14 mntpa. This would include:

• Expanding crude steel capacity at the flagship Vijayanagar works from the present 12 mntpa to 17 mntpa by FY ’24, apart from the ongoing capacity augmentation by 1 mntpa.
• Doubling of the Dolvi plant’s capacity from the present 5 mntpa to 10 mntpa. However, expansion work of the blast furnace and steel melting shop (SMS) has been impacted by Covid and full integrated operations are now expected to commence from around Oct ’21, against the earlier planned July ’21.
• Plans are afoot to double the Vijayanagar coke oven capacity from the present 1.5 mntpa to 3 mntpa by Q3 FY ’22.
• The acquired Bhushan Power and Steel’s present 2.5 mntpa capacity is slated to go up to 3-3.5 mntpa in 12-18 months.
• At Kalmeshwar, capacity enhancement of PPGL by 0.22 mntpa and commencement of production with first coil will happen in Sept ’21.

The capex for the Vijayanagar expansion alone is INR 15,000 crore. That apart INR 380 crore is going into augmenting capacity at Vijayanagar by 1 mntpa at present. The total capex in new projects will amount to INR 25,115 crore.

AM/NS India

ArcelorMittal Nippon Steel India, along with the Odisha government, has initiated a feasibility study for a proposed 12 mntpa integrated greenfield steel plant in Kendrapara district of the state. The proposed venture will require an investment of INR 50,000 crore.

Jindal Steel and Power

Jindal Steel and Power (JSPL) is looking at an incremental 66% crude steel capacity from FY ’22 till FY ’25. Currently, its Raigarh plant produces 3 mntpa and Angul works 5.6 mntpa.

• By FY ’22, JSPL’s projected capacity will be 9.6 mntpa with addition of 1 mntpa in Angul phase 1.
• By FY ’24, the total capacity is expected to touch 12.9 mntpa with addition of 3.3 mntpa at Angul via phase II through the basic oxygen furnace (BOF) route. Angul’s total capacity would rise to 9.9 mntpa alone with Raigarh remaining the same.
• In FY ’25, the targeted production capacity is 15.9 mntpa with the addition of another 3 mntpa through the electric arc furnace (EAF) route through Angul phase II expansion, taking JSPLs total capacity to 15.9 mntpa (and the Angul plant’s to 12.9 mntpa), an increase of 7.3 mntpa from FY ’21.

As per JSPL, the Angul phase II capex plan is around INR 18,000 crore.

Tata Steel

As per a Tata Steel results presentation for Q4 and FY ’21,

• The accelerated capex allocation for the pellet plant and cold rolling mill (CRM) complex at Kalinganagar has restarted as part of the 5-mntpa expansion. The calibrated annual capex is INR 6,979 crore.
• Expansion of the Kalinganagar plant to 8 mntpa from 3 mntpa, at an investment of around INR 25,000 crore is expected to be completed by FY ’24.
• As per a press release, the project configuration and costs include investments in raw material capacity expansion, upstream and mid-stream facilities, infrastructure and downstream facilities, including a cold rolling mill complex.
• That apart, the steel major is eventually planning to double overall capacity across its three sites in Angul, Kalinganar and Jamshedpur from the present 20 mntpa to 40 mntpa, as per reports.

Steel Authority of India

Government-owned Steel Authority of India (SAIL) proposed to expand its capacity to almost 50 mntpa under its Vision 2030 programme. The addition of around 30 mntpa is slated to happen in two phases at a projected investment of over $31 billion.

• In the first phase, Durgapur Steel Plant’s (DSP’s) capacity is to be increased to 7.5 mntpa from 2.5 mntpa and that of Rourkela Steel Plant (RSP) to 8.8 mntpa from the present 3.7 mntpa. Bokaro Steel Plant’s (BSL’s) capacity will be raised to 9.5 mntpa and IISCO’s to 3 mntpa. No timeline has been set for the first phased completion.
• In the second phase, Bhilai Steel Plant’s capacity will be raised to 12 mntpa from the present 7 mntpa, and to 14 mntpa by 2030 and IISCO’s to 7.3 mntpa.
• It is close to completing its INR 70,000-crore modernization and expansion programme that will up its crude steel capacity from 17.44 mntpa in FY ’20 to 23.5 mntpa post-expansion.

NMDC

NMDC’s 3 mntpa Nagarnar Steel Plant in Chhattisgarh is expected to be commissioned by Jul ’21. Its demerger process from NMDC into a separate entity is expected to be completed by Aug-Sept ’21.

Outlook

Close to 30 mntpa of additional crude steel capacity will be up by FY ’24 with further additions beyond this period lined up. The government’s infra push, robust global consumption will likely keep steel demand buoyant going forward, vindicating the production push.