----Interview with Mr. Utkarsh Shah
Executive Director
Giriraj Group
Established with the sole aim at revolutionizing the steel trading industry in India, Giriraj Group keeps growing in leaps and bounds since then. Sourcing high quality steel productsfrom leading manufacturers, Giriraj Group performs as a customer-focused, innovative, and value-driven company. With innovation and continuous improvement at the heart, Giriraj Group creates value by offering a differentiatedproduct range supported by unrivalled customer service.
Asian Metal: Goodafternoon, Mr. Shah. Thanks a lot for agreeing to the interview. Please briefly introduce your business.
Mr. Shah: Sincere gratitude for inviting me for interview. To introduce our company Giriraj Group, we are one of the long historical-standing and largest steel stockholding companies in western India. I am the third generation into this business. We mainly deal with HRC, CRC, PMP plate and other flat steel products.
Asian Metal: Which domestic steel mills do you cooperate with? Where are materialssold? How about customers?
Mr. Shah: Currently, we deal with materials from all the major steel mills in India such as ArcelorMittal Nippon Steel (AMNS), JSW Steel, Steel Authority of India (SAIL), Jindal Steeland Power (JSPL) and so on. We sell materials to Gujarat and Maharashtra. We have 700 plus traders/brokers network in the country using which we supply materials. We deliver materials to retailers and suppliers, and they in turn supply materials to downstream industries.
Asian Metal: What's your biggest challenge at present under serious COVID-19? What about your advantages?
Mr. Shah: We face the challenge of maintaining balanced level of inventories due to shortage of materials as mills failed to produce normally under COVID-19. The harmonious relations with major steel plants in India as well as the marketing network make us run the business smoothly.
Asian Metal: How about the downstream demand in India this year?
Mr. Shah: Downstream demand reduced by 30%-40% in the past two months as industrial activities remained stagnant under COVID-19. At present, it remains unchanged coupled with end users' wait-and-see attitudes, despite the lift of the lockdown.
Asian Metal: How about HRC production in India this year? Do you think the situation will change inthe remainder of 2021?
Mr. Shah: Nowadays all the major steel plants keep their operation rates at 75%-80%. It seems that they would maintain at the current production level in the second half of this year.
Asian Metal: Could you introduce Indian government's industrial layout of steel industries in the coming years?
Mr. Shah: The National Steel Policy has set the target of 300 million tons of crude steel production capacity by 2030-2031. This target may not be reached within the deadline but all the major plants will definitely work towards the direction. As far as I know, JSW will see the production capacity expansion from the present 21 million tons to 34.72 million tons by 2024,an increase of almost 14 million tons. Arcelor Mittal Nippon Steel India, along with the Odisha government, initiated a feasibility study for a proposed 12 milliontons integrated greenfield steel plant in Kendrapara district of the state. Jin dalSteel and Power (JSPL) aims at an incremental 66% crude steel capacity from 2022to 2025. Currently, its Raigarh plant produces 3 million tons and Angul works 5.6 million tons. Tata steel eventually plans to double overall capacity across its three sites in Angul, Kalinganar and Jamshedpur from the present 20 million tons to 40 million tons. Government-owned Steel Authority of India (SAIL) proposed to expand its capacity to almost 50 million tons under its Vision 2030 Program.
Asian Metal: After rising by approximately 55% in 2020, the HRC export prices from China increased by around 30% since early this year. Is there any influence on the Indian steel market? Could you please introduce the current market situation?
Mr. Shah: Prices of steel in India also went up. The price of basic grade of HRC stayed at INR42,000/t(USD575/t) on October 7, 2020, but it hovered at INR70,000/t (USD958/t) in June this year. Nowadays India faces the second wave of COVID-19. The nationwide lockdown hampered the demand to a large extent. At present, steel prices in India remain about 15% lower than those in other countries. With the unlocking started gradually, we lifted prices tentatively. We expect the demand to improve substantially after June 15 and prices would definitely go up after that.
Asian Metal: What about your thoughts for the HRC market prospect in Q3 of 2021?
Mr. Shah: The demand for HRC in India is expected to rebound by around 20% in 2021 (calendar year), ranking the highest increase among the Top-10 consuming nations globally. The domestic demand might outpace supply. As a consequence, we believe prices of HRC would reach a historic high level this whole year with small fluctuations.
