Home About Us News Statistics Specifications Trade Shows Publications Stockwatch Research Papers

Flat Steels- Focus on HR Coils
Upswing in production, consumption

(March 2001)

-By K R Vaidyanathan

With the spurt in demand for consumer products such as cars, refrigerators, washing machines and so on the domestic consumption of steel has picked up after nearly two year stagnation, boosting demand for flats which exceeded that of longs by a big margin.

Over the past decade or so, the flat steel products segment in the country has witnessed a significant expansion, both in production and consumption. The segment is likely to see more developments, which will pose challenges characteristic of a highly competitive market place, according to Mr B. Muthuraman, Executive Director (Special Project), Tata Steel, and its Managing Director-Designate.
Presenting a paper titled “Flat Steel products in India-A new era” at a seminar held in Kolkata under the aegis of Indian Institute of Metals and Joint Plant Committee, Mr Muthuraman observed that as much as 88 percent of the new capacities since the 1990’s is accounted for by flat steel products--hot-rolled (HR) coils/sheets/plates as well as cold-rolled (CR) coils/sheets.
Just over a decade ago, flat steel accounted for less than 40 percent of the total domestic usage; whereas in the developed countries, because of the increasing higher-end applications, the proportion of steel usage was tilted in favour of flat products, in the ratio of 60:40, the latter being the share of long products.
Through the 1990s the situation changed in India, thanks to the spurt in the demand for high-end consumer products such as cars, refrigerators and washing machines. This resulted in the share of flat products in total steel usage moving up to more than 50 percent. It would certainly increase further, Mr Murthuraman predicted.
With the domestic demand for steel products, particularly hot rolled (HR) coils, steadily rising, SAIL’s Bokaro Steel Plant (BSL), with the modernisation of its hot strip mill(HSM) completed in 1998-99 is aiming to exceed capacity to meet the growing market demand.

Bokaro’s all -time production record

The plant achieved an all- time production record of over 3lakh tonnes of HR coils, clocking an impressive growth of 25percent over average monthly production in 1999-2000. BSL’s progressive stepping up of HR coil production is expected to result in higher price realisation, coupled with lower cost of production of HR coils. Moreover, the improved quality pf HR coils from BSL’s hot strip mill has enabled SAIL to make inroads into sophisticated international markets such as US and Europe.
With the Rs 4,469.18 crore modernisation of the Rourkela Steel Plant (RSP) complete, the plant is expected to produce among other items such as plates, HR plates etc, 3.81 lakh tonnes of HR coils.
In the private sector, Essar Steel has increased its hot rolled (HR) coil capacity from two million tonnes to 2.2 million tonnes. The company has also plans to increase this further through a debottlenecking exercise which is underway.
As of today, Essar Steel has a market share of 20 percent in the HR flat products market comprising cold rolling/ galvanising (30 percent), LPG sheets (38 percent), plates and sheets (14 percent) pipes and tubes (5 percent) and other (13 percent) It has also emerged as the leading supplier to the railways, electrical equipment manufacturers and automobile manufacturers.
Among other units that produce HR coils, the Rs 4,138 crore Jindal Vijaynagar Steel Plant commissioned the first phase of its hot strip mill over two years back. The HR mill has a capacity of 1.65 million tonnes a year.
In 1999-2000, the production of finished steel increased to 27.17 million tonnes from 23.82 million tonnes in 1998-99, recording a 14 percent growth during the year. While integrated steel plants, namely SAIL and Tata Steel improved their performance by 13.7 per cent and SAIL clearing its huge inventory , the secondary steel producers such as Essar, Jindal and Ispat performed even better, improving their production performance by 14.3 per cent.

Consumption picks up

Among the Flat products - hot rolled (HR) Coils, cold rolled (CR) coils and galvanised plain and galvanised corrugated sheets, the product that was prominent in 1999-2000 was HR coils. At the same time, the domestic consumption of steel picked up after nearly two years stagnation.
According to the Performance Review of the Iron and Steel, 1999-2000 by the Joint Plant Committee, the demand (or apparent consumption, namely production + imports - exports) for steel recorded an increase of 7 per cent between 1998-99 and 1999-2000. The growth in domestic demand for flats exceeded that of longs by a big margin.Between 1996-97 and 1999-2000, the demand for flats increased by 23 per cent while longs improved 7.5 per cent.

Production of Flat products
(In million tonnes)

  1998-99 1999-00
Tata Steel
Main Integrated
Source : Joint Plant Committee

Exports :

Currently, the principal commodities exported are not only pig iron, sponge iron and semis, but also higher value added commodities, such as HR Sheets, Coils and Plates. In 1999-2000, there has been a 50 per cent increase in export of finished steel products from India. Most significant aspects during the last year export performance was the HR coils / sheet growth of 111.84 percent over the previous year as shown in the following table:

Export of HR Coil sheet
('000 tonnes)

  1998-99 1999-2000 %change
HR coils/sheets 693 1468 111.84

Producing HR coils of thinner gauges

JPC Bulletin on Iron & Steel - Volume V January-March 1999, in its feature, "Promotion of Steel Consumption in India" refers to some of the new technologies that have been developed for producing some prominent items of flat and long products and indicate their impact on production qualities, product prices and customer satisfaction.
New technological developments in the flat steel products segment are in the areas of developing and designing of new products, processes and machinery, for producing sheets and coils of thinner gauges. Till recently HR coil mills existing in the country could not produce HR sheets of less than 2.5 mm thickness, but modern HR coil mills can produce HR coils with thickness ranging from 0.9 to 1.5 mm.
This, together with technological developments relating to strict monitoring and control of quality at different stages of HR coil production, makes it possible to replace the commodity grade CR coils in many end-use applications large capacity steel drums, steel tanks, barrels etc, by thinner gauge HR coils.
Apart from this, it is possible to produce HR coils, which facilitate production of thinner gauges through the recently developed technologies like thin slab casting. A combination of technologies like those which enable use of sponge iron in the production of basic metal, a high degree of automation which permits close monitoring and control of quality at different stages of production, vacuum de-gassing, continuous annealing etc permits manufacturing of HR coils, which are equivalent in performance to many of the commodity grade CR coils in use in number of end use applications. This new technological developments also permit production of HR coils, which can yield sophisticated types of CR Coils, like Deep Drawn and Extra Deep Drawn varieties of CR coils with thinner gauges and high impact resistance.

Growth in value-added HR Coils

With a number of oil and gas pipeline projects coming up value added segments within the hot rolled coil sector are growing up. The steel consumed in these sectors - which use API-grade (American Petroleum Institute) submerged arc welded pipes- has risen steadily over the past few months, according to an Economic Times report. While growth in the base grade HR coils has been slow for the past two years, that in the API grade segment is now rising at a rate of 10 per cent.
India transports only 45 percent of its petroleum products through pipes. As the cost of such transportation is one-sixth of that by road or rail, the potential for new pipe lines is considered good. More pipe lines are also expected on the west coast in view of the number of LNG terminals that have been planned there.
OP Jindal group's Saw pipes, Man industries and Welspun Gujrat Stahl Rohren are the major Indian manufacturers of saw pipes. They make longitundinal pipes used to make pipelines for the oil sector. Welspun also has the capacity to make spiral pipes.
Indian Oil Corp is currently executing orders worth around Rs 1000 crore for its various oil and gas pipeline projects. Petronet Central India (PCIL) also plans to spend over Rs 600 crore for pipeline project. The total length of the proposed pipeline is 1,850 km All this have increased the expectation of saw pipe manufacturers.

Government move to restrict second-hand steel imports

The government is reported to be planning to tightern the norms of import of second-hand and defective steel products commonly referred to as seconds. The move is intended to reduce the share of these items in the import of flat rolled steel products like hot rolled coils (HRC), cold rolled coils (CRC), galvanised sheets and others.
Under the advanced licensing scheme, goods can be imported duty free, if they are used as inputs for manufacturing products that are subsequently exported. The proposed new norms may allow import of prime grade steel only, for use as inputs into exports.
According to the Joint Plant Committee (JPC), for the nine-month period between April-December ’00, imports of seconds and defectives grew to 2.3 lakh tonne, from 1.1 lakh tonne in the same period during the previous year. The total HRC imports into the country for the same period was 4.6 lakh tonne. Imports from Russia and Ukraine accounted for a major portion of the total.
Imports of seconds and defectives were allowed for re-export in the past, for meeting shortage of steel in the country. However, with the entry of new players and after large scale modernisation and upgradation, Indian flat products have been well accepted. Hence there is no justification for allowing use of imported seconds which could only spoil the image of Indian products, according to the ministry sources.

Hike in customs duty

Moreover, bowing to demands from the steel industry, the finance minister, Mr Yashwant Sinha, has proposed to hike the customs duty on seconds and defective HR coils from 25 per cent to 35 per cent in the finance Bill, 2001.
This is expected to slow down the inflow of these products, which have been flooding the domestic market adversely affecting major steel producers, in particular SAIL, Tata Steel and Essar Steel Ltd.
The steel industry however had sought total ban on the imports of such products. The differential rate of duty on seconds/ defectives, at 10 per cent more than on prime HR coils, is not enough, they contend.
In fact, the trend over the past five years indicate that seconds and defective HR coils accounted for just 5.2 per cent of the total imports of the product in 1995-96. But by 1999-2000, it jumped to 28.4 percent and is estimated to be much greater this fiscal.
Recently, the DGFT made it mandatory for all shipments of defective steel products to comply with quality standards, putting them on par with domestic producers. Further, it has allowed the import of seconds and defective items only through the designated ports of Mumbai, Chennai and Calcutta. Moreover, all import consignments of the seconds/defective of steel items have to be accompanied by a preshipment certificate regarding description of material, material quality, Chemical analysis, visual inspection, thickness and width of material and ITC (HS) code No from any of the official inspection agencies. But the inflow of seconds / defective HR coils has been continuing at the same pace.

Production of HR Coils ('000 tonnes)

  Main Producers

Secondary producers



April 98
March 99

April 97
Mar 98

April 98
March 99

April 97
Mar 98

April 98
March 99

April 97
Mar 98

HR coils\Skelp strips
HR sheets
Main producers’ plant wise / category -wise production April ‘98-March ’99


HR coils / skelp
HR Sheets


Terms & Conditions Disclaimer Privacy Policy