Given the fact you see this as an upside, JSW Steel, how is that looking at tapping into this opportunity because you had a capex plan which was quite aggressive from 27 million ton to 37 million ton. Are you on track? Yes, our capacity expansion is from 27 million to 37 million ton which is on track. We are expanding about 10 million tons in the next two years. And we would be giving some more colours with details on the projects during our May annual results meet.
Also one more thing, we have spoken about the opportunity, the way, how things are looking at but how would you categorize the Indian steel industry at this point of time for exports because if we just rewind on a pre-Covid basis, every company large, small was struggling with debt, balance sheet issues, what is really happening, how things are moving in. So whether profits are so high or not, is the balance sheet of Indian steel industry now there to focus, to expand or they can take some leverage so that if they gain market share, they can actually make some investment. Is that a big change in the last three years?I would say that the Indian steel industry is in a much healthier position today versus what it was in the last few years. And we see an opportunity for expanding the Indian steel capacities going forward. Up to 2030, the National Steel Vision anyway has laid out that 300 million tons of steel capacity, 250 million tons of production and about 230 million tons of demand. So we see an expansion in India for meeting domestic demand, which will continue to happen. In addition to that, India will remain an exporter of steel for various products into the world. And we see that as an opportunity and I particularly feel that in the next decade, India will be able to garner market share from countries like China, where they have taken, I would say, a considered step to reduce energy consuming exports, energy consuming production. So over a period of time, we will see China’s steel production moderating and their exports also moderating, which would give an opportunity to the Indian steel industry to gain market share.
If we talk about the longer term picture, as far as steel prices are concerned, one could say that steel prices in the last three years have been very, very good. But when we look at the longer term picture, over the last 10-15 years, the price hike has only been slightly closer to inflation. You think that that is something which will continue 4-5% over the next 10 years? Again, it will follow inflation as far as pricing goes?The steel industry has seen a lot of volatility primarily post the geopolitical tensions from February last year. The commodity prices peaked, and so did steel prices. However, the steel prices corrected between April 22 to December 22 sharply, and even India saw a correction close to 30% here. Having said that steel prices have stabilized on a positive note in the last quarter. We expect that the higher raw material prices will support steel prices at a particular level going forward.
Wanted to get a sense on the supply side a bit more because we understand from industry sources that train rake unavailability is a problem, as well as the fact that the new issue of the private wagons etc, have been limited as well. How big an issue is that?I think we are facing issues on availability of railway wagons, especially for bulk raw material movement. Currently, we move about 110 million tons odd of bulk raw material across all locations, and out of that 70% is through rail. So we would be doubling this volume going forward in the next three years as our capacities go up. Already, we are constrained with respect to the availability of rakes, especially in the eastern sector, especially on iron ore. And we have been engaging with the government to allow private participation in procurement of wagons, so that we are able to supplement as a private sector to the steel wagon availability. We continue to engage in that, and we would be requiring support from the government to see that the private sector participation here is allowed, till the rake situation improves in the country.