Project delays might see a steel glut in some period of 2013: Monnet

India’s steel
demand at present is not in line with the forecasts being made. Adding to woes
are the regulatory bottlenecks which have delayed several projects. In an
interview with media, Sandeep Jajodia, Chairman and Managing Director of Monnet
Group, spoke about the current steel demand scenario in India and said “Some
periods in 2013 may see a steel glut”.

When asked about why steel demand is not taking off, he
said, “The biggest spender is the Government. If the Government is chaotic,
then there is not enough will to create infrastructure. All steel capacities
have been planned based on GDP forecast by the Planning Commission. Now, if GDP
growth is just 60 per cent of its target, there will be a problem.”

Speaking about the
commissioning of a new steel plant, he said, “The plant will be
commissioned by June 2013. But Steel manufacturers have the problem of demand.
All funds that were allocated to infrastructure development have not been put
to work. We are bottomed out. There are
hardly any margins for any steel maker. Last week, the international market has
reported an increase in prices by $40-50. We hope such price rise reflects in
the Indian market, too”.

Speaking about the commercially
mining of coal from Sumatra in Indonesia, he said “We will take 3-5 months
to finish. Soon thereafter, we will start a pit. In the next 6-9 months, we
will start mining. But It’s going to be merchant sale. At that point of time,
whoever is offering us the price — India, Vietnam or South China — we will sell
it to them. The rupee has depreciated so much. Now, it’s not economically
viable to run power plants on imported coal. Therefore, it is better to sell it
there.”

When asked -if his company is focusing on Mozambique he added, “Mozambique story is over. There
are evacuation problems. Railway tracks need to set up. Opportunities are no
more easily available.”

Speaking about
expansion plans he said, “We will establish the current projects. Then our
attention will be to start working on Orissa Sponge. It makes no sense to
announce big projects. We would go step-by-step.”