::: I N S D A G ::: Newsletter >> August 2009

Steel industry is facing one of the toughest challenges in the recent period. In the post meltdown phase by end 2009, it was generally believed that the worst that took everyone by surprise is over and with stimulus packages by the worried governments pulling up the growth momentum, steel industry would return on rails. Rising prices of the finished products at the beginning of the year reiterated the confidence. However the euphoria proved short lived. First it was the shooting up of prices of raw materials, Iron Ore and Coking Coal followed by slackening of demand and the consequent fall in finished prices. While the downgrading of USA by Standard & Poor signaled a deep rooted recession with loss of income, wealth and increasing unemployment, the latest report by IMF confirmed the enormity of the problem of sovereign debt crisis in Euro zone. Indian steel market projected to grow by around 10% in 2011-12 would be hard pressed to expand by more than 6%. Even if it happens this way, Indian steel market would continue to be among the very few fast growing markets.

Amidst the high risks of falling demand from construction and other processing industries, the capacity augmentation efforts through brown field expansion has led to an anticipated surplus scenario by end of 2012. The earthquake and landslide disaster has further added to the woes of North and hilly areas of West Bengal and north east regions. The silver lining is the opportunities provided to the steel frame structure in building and other industrial structures that can withstand the tremors and landslides. This is not the first time that such a realization has emerged about the utility and effectiveness of steel framed structure in building. But the memories of disasters are always short lived. May be, not adequate efforts were put forward in a systemic and structured manner either by the industry or by the policy planners. Apart from the severity of the natural disasters which highlighted the strength and ductility of the steel structures, the wide use of non-standard cheap variety of constructional steel demonstrated the supreme ignorance of the common house owners about the advantage of good quality steel and the laxity on the part of the government in enforcing the certification of standard grade steel.

It is heartening to note that Ministry of Steel has taken up in right earnest the task of mandatory certification of a few grades of steel of common use and INSDAG has been advised to conduct an awareness campaign of use of steel conforming to BIS standards while highlighting the pitfalls of using bad quality steel. In India the construction companies and also the agencies executing the construction projects, particularly in the real estate sector, are steadfastly concerned with the initial cost estimates and the standard concrete designs. There is hardly any consideration for life cycle cost advantage and innovative structural designs. As a result there are abundant scope for compromise on safety and environmental aspects. All efforts at propagating the utility and effectiveness of steel composite structures must be continuous and targeted at the common man, the ultimate users. Construction at seismic zones, coastal belt and hilly terrains must conform to a much wider application of steel designs as per standards. There is also good deal of work left for the enforcing arms of the government which would prevent the use of cheap non-standard grades steel. Issuing notifications must be followed by rigorous enforcement of the same. Consumer awareness has the potential to make it happen and INSDAG with active support of producers, small and big, is to make utmost endeavour to achieve this.