Availability of market and availability of raw materials at a reasonable price
Viability and sustainability of any steel plant depends mainly on two factors : Availability of market and availability of raw materials at a reasonable price.
If one takes a global view, it can be seen that the conventional steel markets like US, EU are more or less stagnated, Middle East is going through a rough patch due to oil price crash, African markets yet to grow and SE Asian markets being steady but slow.
China is trying to control it’s overheated economy and is reducing the steel production gradually. India wants to boost its steel production but domestic market seems to be stagnated for the last few years.
The new government at the center is completing it’s first year but the steel markets are still depressed. The steel industry expects the government to trigger off few mega infrastructure projects which can provide the required thrust to the steel demand and also move the economic wheel forward.
In case of raw material availability, the situation is far from normal. Many iron ore mines in the states like Karnataka, Goa, are closed due to legal irregularities. Also, the new coal block allocation process is not yet complete.
Thus for steel industry, there is an acute shortage of these two vital raw materials and this fact has been affecting the performance of almost steel plants for the last few years.
The industry expects the government to punish the guilty but at the same time clear off these bottlenecks as early as possible so that the industry can freely grow.
The third factor which generally skips out of our mind is availability of technically qualified manpower.
Today in India, very few metallurgists graduate every year and many of them switch to other more paying industries like IT. They prefer to work in an AC office rather than blackening their hands on the shop floor of a steel plant.
India plans a big leap in steel production in coming years.
From where the manpower will come ? Who will run these plants? These problems though grave are not at all impossible to solve.
If the industry and the government work hand in hand, I am sure they can together solve these and take Indian iron & steel industry to a new height.