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CHAIRMAN's DESK

" ... There is a general sense of wonder at the face of developments within China and there was considerable speculation on whether this pace can be sustained ... " The performance reports for all the public undertakings and other private steel companies for the third quarter of the current financial year have started coming in and the results are indeed encouraging. SAIL has registered an unprecedented third quarter profit of approximately Rs.1500 crores and Tata Steel is not far behind with a net profit of Rs.800 crores. All steel companies in general are doing extremely well on the back of extremely buoyant market conditions which, as per indications, are likely to continue for quite some time. This is really encouraging news for the industry and we hope that they will avail of this window for upgradation of technology and enhancement of capacity. I had an occasion to attend a workshop on World Outlook for Steel jointly hosted by IISI and OECD secretariat on 12th and 13th January, 2005. There is a general sense of wonder at the face of developments within China and there was considerable speculation on whether this pace can be sustained. There are fears that China may very soon become- a net exporter leading to a crash in the market. The Chinese delegation who attended the meeting was categorical that their infrastructural development needs were no where near completion and they will require a lot of steel for quite some time to come. They did not anticipate that they will become a net exporter within the next five years and in fact, they predict that their appetite for steel will continue to grow over the next five years at least. Indeed they believe that there is tremendous latent capacity for consumption of steel within the country and this capacity is not likely to be reached in the near future. With the signing of the Kyoto protocol, the CDM mechanism is due to commence w.e.f 18th. February, 2005 and it is high time that our industry avails of this opportunity for upgrading technology and trading carbon credits. Given the fact that a production of 1 tonne of steel produces about 2 tonnes of carbon, the steel sector in particular has been identified as a major area of focus by the environmentalists. In fact, delegations from Japan and Canada have already visited India on an exploratory mission. We envisage an important role in this regard for our technical institutes, i.e., NISST and BPNSI who are assisting the SSI sector and can help them to reduce green house gas emissions and thus avail for carbon credits, which will be traded in the market. This issue was further clarified in an International Workshop held recently at Pune and it appears that this is the single largest opportunity not only for revenue generation but also for enhancement of the technology and environmental friendliness of our secondary steel units, i.e., rerolling mills, induction furnaces, etc. This is an area where the industry needs to speedily galvanise itself and ensure that they make the best use of this opportunity. ( J P Singh Joint Secretary, Ministry of Steel & Chairman, JPC) (This is excerpted from JPC Bulletin December' 04)