Overcapacity in steel industry, slow down of global demand, and dumping in India are compelling domestic steel producers to review their competitiveness. Raw material security, cost reduction, proper infrastructure, and land acquisition are issues to be addressed currently.
Over 300MT global overcapacity, Low global demand following Eurozone crisis, slowing down Chinese growth, increased Chinese export to India – all these are changing circumstances in which domestic steel industry must improve their competitiveness. With raw material shortage at home, the companies should look for acquiring foreign iron ore/coking coal assets. The companies should modernise their coal washery, adopt latest technologies to utilize iron ore fines through beneficiation and
pelletisation, and develop technology to produce steel from iron ore fines and low grade coking coal.

Research is to be emphasised to produce value added products. Improved energy efficiency will help reduce carbon footprint and operational cost. In changing situation due to falling demand and oversupply companies should think of their optimal capital structure business model for efficient capital allocation to maximize shareholder value. In
medium and long term demand of domestic steel will improve due to the government’s spending on infrastructure worth more than US$ I trillion.

The government should take up development of road, port, railways, dedicated freight corridor through Public-Private-Partnership (PPP) for speedy implementation.