In his presentation on Monday, April 6 during the SteelOrbis Spring 09 Conference & 60th IREPAS Meeting in Athens, Dr. Sudarshan Singh, chairman of ANT Steel Engineers Asia, while stressing India's strong growth potential, predicted that the recovery of the steel industry will start in Asia.
According to Dr. Singh, in the overheated global market many shortcomings have been exposed in the financial sector, with confidence in financial institutions consequently weakened. The steel industry has suffered due to high risk and the market has slowed down.
On the other hand, certain factors encourage expectations of a revival: these include the strong fundamentals of the banking sector, rising consumer confidence, institutional reforms in general, globalization and steel industry to be efficient. Educating investors and introducing institutional reforms could lead to a quick recovery. "During these difficult and discouraging times we have to build for the future. This is true for the steel industry," he said.
Dr. Singh expressed the view that economies such as India, the Middle East, China, Latin America and Eastern Europe held good potential.
India has strong potential, he said, because of its richness in natural resources, its wealth of human resources and skills, and also due to the size of its market. In addition, India is the largest producer of DRI, while its estimated growth for the current year is six percent. Furthermore, the banking sector in the country has strong fundamentals, and while the country has a strategic geographical location.
Dr. Singh also gave some figures regarding India's resources, specifically in comparison with China. This latter country has 114,500 million mt of coal reserves (12.6 percent of world reserves), whereas India has 92,445 million mt (10.2 percent of world reserves). Additionally, China has 58 million mt of iron ore reserves, while India has 23 million mt.
As regards steel consumption, Dr. Singh stated that China's steel consumption per capita in 2008 is estimated at 315 kg, with the average estimated figure for worldwide per capita consumption at 210 kg. In comparison, India's steel consumption in 2008 is estimated at 53 million tons, equivalent to approximately 44 kg of steel per capita. India's steel consumption figures are predicted to rise to 78 million tons and 64 kg respectively in 2013, and to 108 million tons and 87 kg in 2015. The population of India in 2008 was 1,201 million, and is expected to rise to 1,210 million in 2013 and 1,215 million in 2015.
In terms of factors influencing the steel industry in India, Dr. Singh said that the banking sector in the country is healthy, the country is rich in minerals, production costs are low, while domestic consumption is growing. Also, the government provides the necessary funds for infrastructure development and the growing incomes of rural populations will result in increased consumption of goods.
Concluding his presentation, Dr. Singh made certain predictions. The revival of steel industry, he said, will start in Asia, with India and the Middle East playing the key role. The growth potential for the steel industry in India is high, he affirmed, while foreseeing a revival in India and the Middle East starting from the third and fourth quarters this year. China, Brazil and Eastern Europe will follow the revival trend starting from the first quarter of 2010. In addition, Dr. Singh predicted that iron ore and coal rich regions will dominate crude steel production, while processing of steel shall be concentrated more in regions with strong consumption.
Meanwhile, Dr. Singh also spoke with SteelOrbis specifically about ANT Steel Engineers Asia and its activities. The company has been invested in by Saudi Arabia's Al-Tuwairqi Group of Companies (ATG) and by Dr. Singh. It provides world class EPC (Engineering, Procurement and Construction) services geared towards serving the rapid development of the steel industry in Asia and Africa. The company's aims are to introduce the latest technology, to initiate education programs to develop skills, to achieve productivity enhancement with and without investment, to provide the services of highly qualified engineers and technicians, and also to set up a steel university. Dr. Singh told SteelOrbis that they are in communication with the Indian government with regard to the latter issue and are currently discussing the project.