TCold Rolled coils/sheets are versatile and sophisticated steel products with a wide range of application in the industrial, agricultural and the transportation sectors. CR Coils/Sheets are ductile with excellent welding and forming properties and ideally suitable for the production of various shapes and components, both for the industrial and household applications. Besides, the process enables the production of sheets in thickness as low as 0.10 mm, providing substantial economies in the steel consumption and the material costs vis-a-vis the substitutes like Aluminium, PVC etc. CR coils/sheets are produced in a wide range of combination of mechanical properties like Tensile, Elongation, Hardness and a variety of surface finish for different applications. Steel industry has met the challenge of the steep rise in the prices of the Petro products in the past decade and the energy crisis by the development of the light weight and thinner gauge high tensile sheets, for the production of energy efficient Automobiles. The global steel industry including some Indian producers and the Automobile Manufacturers are in the process of developing I F Grade Steels for the Ultra Light Weight Body for the Vehicles.

Hot Rolled Coil is the basic input for the production of CR/Galvanised products, accounting for over 70 per cent of the production costs. The future growth of HR Coil Producers and the CR Industry shall largely depend on the product development and reduction in production costs to achieve global competitiveness and enhance market potential.

Production trends and expansion of capacities

The production, consumption and the exports of Cold rolled sheets and the downstream galvanised sheets have registered a steady growth in the past few years and this trend shall continue notwithstanding temporary setbacks.

Installed capacities and pattern of demand

The installed capacities for the production of CR and Galvanised sheets has also risen sharply and may be broadly classified between the integrated and the Secondary Producers.

Apart from the foregoing, EBG India Ltd have an installed capacity for the production of 100,000 MT of CRNO/CRGO Sheets and Shree Precoated Steels have a capacity for the production of 50,000 MT of Colourcoated sheets.

The current Sectoral consumption pattern for CR products in India is indicated below:

Profile of the CR Industry - Technology and Productwise

CR Industry in the Secondary Sector consists of 16 full width and 40 narrow width Producers, catering to different segments of the market at competitive prices. The focus is on the production of thinner gauges and specific sizes to meet the customer's requirements which can not be produced at economic costs in the bigger mills. The production and export performance of the Secondary Producers is given below:

As over 60 per cent of the current demand of 4 million tonnes is for O and D grades, it is not necessary for all the producers to install facilities for the production of special grades. The bigger units, however, incorporate 6 Hi/4 Hi state of the art automated and computerized mills with AGC system, EDT to control surface roughness and texture, Hydrogen annealing for clean bright finish, tension leveling lines for uniform flatness etc and their products conform to the highest Indian and global standards. Corsma member units are presently the major suppliers of Cold Rolled and Galvanised Sheets to the Auto Sector, Consumer Durables and other sophisticated industries. Apart from meeting the requirements of the domestic market, Secondary Producers are major exporters of CR/Galvanised and Colourcoated sheets. The Galvanised sheets are produced on continuous Electro Galvanising lines by the Hot Dip process with high anti-corrosive and weldability properties. The Galvanised products are widely used for roofing, containers and water tanks, interior and exterior panels of buses and commercial vehicles. The broad product feature of CR/Galvanised sheets produced by Corsma members are given below:

Apart from the foregoing, EBG India Ltd produce CRNO Electrical sheets in the thickness range of 0.50 - 0.65 mm, in grades M-15/19/27/36 as per AISI and CRGO sheets can be supplied conforming to M4/M5/M6 as per AISI. M/s Shree Precoated Steels Ltd, another Corsma member, is equipped to produce 50,000 tonnes of Colourcoated sheets conforming to the Indian and global standards.

Challenges before the CR Industry

Cold Rolling Industry in India is passing through a difficult phase due to overall surplus capacity, pursuant to the commissioning of new CR Mill at TISCO. The working group on Iron and Steel had projected a demand of 5.6 million tonnes of CR Coils/Sheets by the end of the 9th Five Year Plan in 2001-02 and 8.36 million tonnes by 2006-07, based on the projected growth of GDP and the Industry. However, there has been substantial shortfall in the achievement of the Plan targets and CR industry is presently saddled with surplus capacities due to stagnant demand. In the absence of any Apex body and joint action to stabalise the market, the price of HR Coils, CR and Galvanised sheets have crashed to uneconomic levels due to unhealthy competition. Steel industry has thus been incurring heavy losses despite a virtual ban on imports through TBT and floor prices for HR Coils. The problem of surplus capacity is to be addressed through product and market development and the reduction in the production costs, necessitating close collaboration between the HR Coil Producers, the downstream CR Industry, Pipe and Tubes Industry etc to meet the global challenge.

Restrictions on the imports of Hot Rolled Coils

The indigenous production of HR Coils sharply rose from 3.95 million tonnes in 1995-96 to 7.8 million tonnes in 2000-01 and imports are now confined to materials for export production and sizes/grades not available from the indigenous sources e.g. coils for the production of CRNO/CRGO electrical sheets, coils in widths above 1480 mm, coils, with low carbon content of 0.02 and below etc. The indigenous producers may now focus on the development of value-added higher grades for the domestic and the export markets, to improve profitability and capacity. The existing barriers on the imports be lifted and in the event of any dumping, Anti-dumping duties may be imposed on the recommendation of the Anti-dumping Directorate as in the case of imports of HR Coils from Russia and some other countries.

Prospects of Cold Rolling industry in India

Cold rolled steel products presently constitute around 13 per cent of the total steel consumption in India against 20 per cent in USA and other developed countries. The demand for Cold Rolled/Galvanised products is therefore, expected to grow at an accelerated rate with the rise in GDP and income levels. World Steel Dynamics and other analysts have projected that demand for steel products in India shall increase at an average of 2 million tonnes per annum in the next decade. In this context, the surplus capacities may only be a passing phase and demand for Cold Roll sheets may rise to around 6 million tonnes by 2005, considering the rise in demand - for downstream products. It shall indeed necessitate allout efforts on the part of the producers for market and product development, together with the reduction in the production costs. Apart from the coated sheets, Auto Sector, Grain Storage and Construction Sector and exports offer a good potential for market development.

Pursuant to the technological developments in the past decade Mini Mills have acquired capability to produce high grade Long and Flat products at competitive prices, without huge capital investment, long gestation periods and elaborate infrastructure developments necessary for the integrated steel works. Cold Rolling mills are now available in the lower capacity range of 2,50,000 to 300,000 tonnes per annum or in the bigger range of 1.2/1.4 million tonnes per annum capacity. The Mini Mills now incorporate computerised rolling systems, Hydraulic automatic gauge controls AGC system, Tension leveling lines, EDT and hydrogen annealing for the production of high grade products, with close tolerances. Besides, the investment cost per tonne and interest and depreciation charges are significantly lower than the bigger Mills and as the Mill can produce specific sizes, the substantial costs of providing service centre facilities are also eliminated. A Mini Mill is also better placed to achieve the breakeven point and full capacity utilization than the bigger mills. The smaller mills are ideally suitable for the production of specialty products for the Auto Sector, Defence etc and offer more flexibility and prompt delivery schedules. The demand for specialty products with 'just in time' deliveries has been rising with the sophistication of the industry and pressures for cost reduction due to intense competition. Cold Rolling industry has thus bright prospects due to its cost effectiveness and flexibility in meeting the customer's demand for small lots and phased delivery schedules. It is considered that the production of CR, Galvanised, Colourcoated and Electrical sheets by the Secondary Sector may increase by 75 per cent to 100 per cent by the end of the 10th Five Year Plan.

Need for collaboration and integrated planning

In the foregoing background, there is good scope of collaboration between the mid-size Cold Rolling mills and the integrated steel plants to team up for the production of cold rolled and coated products at competitive costs, to meet the global challenge. HR Coils, CR and Galvanised sheets are part of a single value chain and their fortunes are closely interlinked. In the freemarket globalised economy, the industry should eschew predatory domestic competition and develop strategies to meet the global competition as well threat from the substitutes. Corsma has always held that the integrated steel producers of Hot Rolled Coils should consider Cold Rolling industry as their biggest customer rather than a competitor, in the overall national interests. It is also necessary to build up institutions to promote collaboration between various segments of industry, to generate synergy and formulation of integrated national policies for the development of the steel industry, selecting the best options. The global steel industry is advancing at a fast pace and there is an urgent need for the industry - Govt. partnership, to charter the future course and roadmap for the growth of the Indian industry, to meet the projected requirements and avoid imports.

[The author is Executive Director, CORSMA]