In present state of affairs, a lot of announcement is made for capacity expansion in Flat Steel Industry. Many Indian Flat manufactures have planned to ramp up the capacity in near future.
How far capacity expansion is justified?
As per industry sources, JSW Steel, the largest Flat Steel manufacturers of the country, has recently announced to raise its capacity by 1.7 MnT to 5 MnT. In line, SAIL is also ramping up the capacity by 1.2 MnT pa at Rourkela Steel Plant. The combined capacity of all players in HRC sector stood at 35.6 MnT in FY14 and expected to touch around 41.6 MnT in FY15.
How India going to be next manufacturing hub for automobiles?
Many industry veterans have an assumption that India is going to be one of the largest manufacturing hubs for automobiles in Asia. It is expected that this will brings immense demand for Flat products in coming days. For an instance recently, Chennai has planned to set up an Auto City, which is likely to witness good growth in demand for flat steel products in near-term.
In addition to this, availability of raw material and geographical advantage made India a competitive hotspot for manufacturing of finished products. However, contrarians believe that the additional capacity is not going to be absorbed in the domestic market soon owing to lack of demand. This will encourage manufacturers to export these surplus quantities to the global markets such as European, Middle East, CIS and South East Asian Countries.
In current scenario, policy uncertainties have stucked many infrastructure projects. Experts believe that after the completion of general elections, a lot of these projects will get the clearance which result to hike in demand for these products. This hike in capacity will feed to the need of the domestic market.