Tata Steel aiming for 30mn t/yr capacity by 2025

Indian private-sector firm Tata Steel is aiming to expand its crude steel capacity to 30mn t/yr by 2025, from around 20mn t/yr currently.

Tata Steel's flagship plant in Jamshedpur has a nameplate capacity of 11mn t/yr, while its Kalinganagar plant has 3mn t/yr of capacity. The firm acquired 5.6mn t/yr producer Bhushan Steel and the 1mn t/yr steel business of Usha Martin over the past year.

Capacity expansion at the Kalinganagar plant to 8mn t/yr is underway, with a cold-rolling mill to be commissioned in the April 2020-March 2021 fiscal year and other equipment, including a blast furnace, to be started up gradually.

Tata Steel also expects to upgrade the Jamshedpur plant, while it invests in sourcing more raw materials from its own iron ore and coal mines. Tata Steel currently secures 100pc of iron ore for the Jamshedpur and Kalinganagar plants and partly sources ore for the Bhushan Steel plant from its own mines. Tata's coal mines are able to meet around 27pc of the Jamshedpur and Kalinganagar plants' coal requirements.

Tata Steel is considering expanding its Jamshedpur steel plant to 13mn t/yr, managing director T.V. Narendran told Argus in October 2018.

"We recognise that there is a significant potential for increase in steel demand in India in the long term given that per capita steel consumption in 2018 was less than one-third of the world average," said Tata Steel. "Various government initiatives, including ‘Make in India' projects, increased spending on infrastructure and increased focus on rural development are likely to support the increase in domestic demand for steel, providing opportunities for domestic steel players," the firm said.

Large Indian steelmakers continue to expand production capacity, bucking a worldwide trend of shedding capacity amid excess supplies in global markets.

Delhi has a production target of 300mn t of crude steel by 2031, betting on industrial and construction sectors to maintain rapid growth in the long term. Steel demand is widely expected to grow at around 6-7pc in the April 2019-March 2020 fiscal year, following a 7.5pc growth in 2018-19.

Tata Steel, India's third-largest iron ore producer, uses its entire production for its own operations. The company produced 23.37mn t in 2018-19 compared with 23.04mn t in 2017-18. State-controlled merchant mining company NMDC is India's largest iron ore producer followed by state-run Sail, which also uses mined ores for its own operations.