What are the major challenges faced by the stainless steel industry? How to overcome the challenges?
Stainless steel is prominently used in many industries, mainly infrastructure and industrial applications. In the year 2022, the global stainless steel production was measured to the tune of 58 million metric tonnes. While the post-lockdown numbers show an increase in production, the decadal demand for stainless steel has witnessed a marked reduction.
The industry has been facing the challenge of post-boom surplus since 2014. This has led to trade disputes and imbalances due to political and anti-dumping restrictions.
The stainless steel industry has no control over the fluctuations in the prices and supply of raw material, including that of stainless steel scrap imported for recycling, while the slowdown has overall lowered the prices.
If we specifically look at the Indian Stainless Steel Sector, the lack of infrastructure and skilled labour are two additional factors that make it difficult for companies to operate at peak efficiency.
Steel produced globally to the tune of 1.8 gigatons is also a major source of GHG emissions (Ref: weforum.org, report on Climate Breakthroughs). The challenge faced by this industry is to extensively reduce carbon emissions and head towards a net zero. Currently, steel manufacturers use coal as the major source of fuel and any refurbishment requires huge investments as it is a capital-intensive and continuous process industry.
The buck does not stop here. The high price of low-emission stainless steel products is another challenge that will influence the demand and supply. The average price for green steel in the current market scenario is approximately 30% higher than conventional stainless steel. Moreover, the product price is set by marginal players thus affecting the transition towards green steel.
But the future is not bleak.
According to Mr Neeraj Kochhar, CMD, Viraj Profiles, “The need of the hour is focused and collaborative efforts by industry leaders to create innovative breakthroughs for the betterment of the stainless steel industry.”
Countries like India can streamline regulations to create a business-friendly market and increase demand for stainless steel. The focus should also be on easing trade restrictions for local players and promoting domestic production. The Government has to essentially invest in infrastructure, such as transportation and power grids, to make it easier to transport raw materials and finished goods.
Overall, collaborative efforts and strategic partnerships can help stainless steel companies to access new markets and secure raw material supplies. The industry has to look beyond just the refurbishment of plants and processes. It is time to diversify its product offerings and adapt to changing market conditions and customer needs. According to Mr Siddartha Modi, President, Viraj Profiles, “Investing in R&D and new technologies to develop efficient, sustainable and cost-effective products can help the industry in overcoming challenges and remaining competitive even in a highly volatile market.”
CMD,
Viraj Profiles
With the majority of countries coming together to deal with climate change concerns, major steel producers and stainless steel product manufacturers in India and across the globe have set ambitious targets to reach net zero. This has led to a radical shift in focus towards recycling scrap steel to manufacture stainless steel products for industrial and household use. Stainless steel product manufacturers like Viraj aim to reduce carbon emissions across the value chain, starting from their feedstock suppliers to supply chain services.
“We realize the need to embrace sustainability and are investing in new technologies like arc furnaces to recover 100% metal from melting shop waste, switching to renewable energy and reducing the carbon footprint to ensure that our products remain competitive in changing scenarios,” states Rakesh Chauhan, CEO, Viraj Profiles.
