Narendran also ruled out the possibility of hiking steel prices further, as rates were raised earlier this year after the Russia-Ukraine crisis started.
“Most of the steel price increase happened in February-April. Right now, costs are stable, so steel prices are stable. We are comfortable with that,” the top Tata Steel official said.
He said steel prices in India are likely to be Rs 8,000-8,500 per tonne higher in the first quarter of 2022-23 as compared to the fourth quarter of last fiscal.
Narendran said the demand-supply situation in the steel industry is more balanced at present and this will continue for some time.
“We are now at a stage where a few things have changed… one is China is no longer exporting as much steel as it used to in the past, other big exporting countries like Japan and Korea are also reducing shipments because they don't want to import raw materials, leave a carbon footprint and export steel.
“Therefore, we're seeing a greater restraint being exercised by most countries which have traditionally been big exporters. In Europe, Ukraine and Russia have also been large exporters, but owing to this war, they are also not in the market,” he explained.
Narendran said steel consumption will continue to grow in India, South East Asia and Africa, whereas demand in mature markets is likely to be sombre.
India is fundamentally a good place to manufacture steel, he said, as it has iron ore, unlike most of the other big, steel-producing countries. “Also, much of the iron ore is in some of the poorest parts of India. Therefore, it has a great opportunity to create steel capacities, jobs and also be an exporter.”
He, however, said India’s steel demand has traditionally grown at less than the GDP growth rate, whereas in developing countries, consumption “should ideally grow at a faster clip” than the GDP.
Narendran also expressed apprehension about the crude steel production target of 300 MT by 2030 as envisioned in the National Steel Policy 2017.
“I don't think 300 MT by 2030 is realistic, because we have lost three-four years due to the pandemic and other factors. Even if it grows at 7-8 per cent a year, you will be in the 200-250 MT range. That would be a more realistic estimate,” he said.
India produced around 120 MT of crude steel during the financial year ended March 31.