India is now the 5th largest producer of crude steel

India has moved up two places in global ranking to 5th place in production of crude steel. An expert committee set up by the Ministry of Steel which went into the issue of under reporting of capacity and production data has revised the production figures for crude steel in calendar year 2006 to 49.45 million tonnes as against 44 million tonnes in the pre-revised data. Earlier India held the 7th rank among the global steel producers. The revised figures for crude steel production in 2006-07 is pegged at 50.71 million tonnes and that of finished steel at 51.90 million tonnes.

It was perceived for quite some time that estimates of induction furnace and re-rolling sectors were on lower-side, owing mostly due to under-reporting of crude steel data by the electric induction furnace route of production. This in turn has affected production figures for semi-finished and re-rolling (long product) sectors. At the same time, flat steel products have faced the problem of double counting due to inclusion of standalone finished output as also its purchased finished steel input in total finished steel production.

To solve the problem of under-reporting, an Expert Committee was constituted by Ministry of Steel in December, 2006, drawing members from industry, academicians in which Economic Research Unit (ERU) and Joint Plant Committee (JPC) had played a key part. The Expert Committee after deliberations and analysis, on the basis of the operating practices maintained as derived from a representative sample of 150 units, had estimated a capacity of 18.7 million tonnes (mt) and a production of 13.5 mt for the Induction Furnace Segment during 2005-06 by the Indirect Approach. This approach was based on the sales of Induction furnaces during 2001 to 2005 and their additional capacity installed during this period. At the same, the capacity utilization was determined and subsequently the production was estimated taking 2000-01 as the base year. From this under-reported production during 2001-02 to 2005-06, the production of long products was estimated as per the yield factor.

Double counting of flat products was identified on the basis of the quantity of production of stand-alone cold rolled /galvanizing /pipe units and their corresponding inputs of hot rolled, cold rolled products included in total production of finished steel. The exercise was initially carried out for the sample year, 2005-06 - for which double counting was found to net off with under - reporting - and later extended to all the 5 year period under review, i.e. 2001-02 to 2005-06.

Having provided a tenable solution to both problems, JPC has also moved back in time, and "corrected" its time series data for all years since 1992-93 - incorporating the impacts of under-reporting in non-flat and double counting in flat products. This has resulted in two new concepts: one, production of Finished steel in the country will be represented by production for sale - aggregate of net category-wise production for sale of every producer and two, apparent consumption of finished steel will be represented by net consumption after adjustment of double counting or "adjusted consumption:. The data corrections have also resulted in an enhancement of total capacity and production of crude steel.

At the same time, the data reporting formats have undergone a change.

JPC classification of producers henceforth will be large scale (capacity of crude steel of 0.5 mil tonnes and above) and Medium/Small scale. The reporting of Large-scale producers will be disaggregated producer-wise. JPC will also introduce the reporting of crude steel by process/route on a yearly basis.

The revised data series for the last five years for crude steel production, capacity and capacity utilization is given below and shows that for 2006-07, Indian crude steel production stands revised at 50.71 mt compared to 46.46 mt of 2005-06. Corresponding values for capacity are 56.48 mt and 51.17 mt.

Source : Press Information Bureau

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