Tata Group nowadays is soaring up in the headlines of the newspapers for giving a pink slip to the company’s chairman, Cyrus Mistry, who took over as the chairperson in 2011 and appointed Ratan Tata for further responsibilities. Well, he has hardly taken back the duties in the firm and reports now came out that one of the divisions of the group, Tata Steel has raised demands for coking coals. Besides, India’s another largest business conglomerate JSW Group has also boosted requirement of the same. The combined demand from both the giants planned the commissioning of 6.7 million tonnes (mt) of additional output capacity. Going by the reports, India’s overall coking coal imports will possibly rise by 5.7 percent to a record 46 million tonnes.
“Although India’s coking coal imports remained largely flat in FY2016, the same is slated to rise in the current year on the back of higher demand,” India Credit Rating Agency (ICRA) said on Wednesday. If we talk about the coking coal import data between the period of 2015-16, it stood at 43.5 million tonnes and as the Icra report suggests, it is likely to rise by 16 mt for 2016-17 and 49.2 mt for FY17.
The boost in the country’s coking coal imports is the effect of surplus demands from steel mills. Reports say, The commission of additional capacities for the first quarter of financial year stands at 3.7 mt for Tata Steel whereas JSW for 3.0 million tonnes. In the wake of various protection measures rendered by the government of India, the steel mills would be granted to demand raising the production. Usually, the steel demand paces side by side with growth in gross domestic product of the country. As the government is looking forward to increasing on infrastructure development and also making its mind to investment on it, the country’s steel consumption is slated to soar up to near seven per cent this year. Also read Why Cyrus Mistry was fired?
In a record, it is found that last financial year had captured cumulative production at 89.8 mt against to 88.2 mt for 2014-15. With the ongoing financial year (1HFY16, April-September), the mills cumulative production rated at 47.8 mt compared to 44.6 mt in the same first half of last year. Furthermore, Steel demand enhanced by only 0.5 per cent between the period of April and August followed by a great hike in September, Data analysed by Joint Plant Committee.
“This means steel is stockpiled somewhere in the pipeline. But, an estimated 35 per cent (fall) in import is likely to filled by domestic steel mills, thereby raising demand for coking coal,” an observer’s saying. From the recent report taken by Moody’s Investors Service, it is believed that India’s steel production will continue to see growth in near future, with the focus of government on infrastructure.
“We expect year-on-year steel demand in India to increase to high single-digit percentage in 2016 and 2017…as the country’s GDP growth of around 7.5 per cent in 2016 and 2017, based on Moody’s forecast, remains among the highest in Asia. India’s reform and policy support for infrastructure and manufacturing, as well as increasing urbanisation, will drive steel consumption,” Moody’s said. Read more Business News.
Love playing sports? Download this app "Win cash rewards while playing sports that you love".