Games fail to cheer steel makers

Last Updated: Thu, Oct 14, 2010 20:11 hrs

Beijing Olympics consumed 6-7 mt steel, while CWG demand was less than 1mt.

Hosting a big global sport event generally boosts infrastructure spending in the host country. Delhi Commonwealth Games scored poorly on this front.

According to industry players, Beijing Olympics created demand for six-seven million tonnes steel in China. But the ongoing Commonwealth Games in Delhi were not so beneficial for India’s steel industry and led to demand for less than one million tonnes.

The main venue for the Beijing Olympics, the Beijing National Stadium, or the Bird’s Nest, consumed 110,000 tonnes steel. That’s close to the total steel used in all 12 venues and the Games Village built for Commonwealth Games 2010.

The Olympics were awarded to Beijing in 2001 and till 2008, the country’s consumption increased 157 per cent and production 194 per cent.

The Commonwealth Games (stadia, Games Village and peripheral development) in India stand in contrast. The total steel used was less than a million tonnes, even though steel consumption between 2003 (when Delhi was awarded the event) and 2010 increased 90 per cent and production 67 per cent.

Steel Authority of India (SAIL) supplied the bulk of long products, a company official said. Most of the flat steel used in the Jawaharlal Nehru Stadium came from JSW Steel. But there were other companies as well.

The steel was used in the stadia, the Games Village and for peripheral development, which includes Delhi Metro, the new international airport terminal and BHEL’s Bawana Power Project. "The growth in steel consumption is a result of China’s infrastructure creation. Another round of growth is expected on account of China’s Go West Policy, which will cost about $300 million," JSW Steel (sales and marketing) Director Jayant Acharya said.

India’s per capita consumption of steel is 46 kg while China’s is 500 kg. "Government norms will have to change. For infrastructure creation, more steel should be used for longevity," JSL Stainless Director (strategy and business development) Arvind Parakh said. Incidentally, the cement to steel ratio in India is 4:1 while in China it is 1:1.

"China uses much more steel in building roads," Parakh added. The story is the same for stainless steel. Stainless steel consumption per person is less than one kg in India, as against four kg in China.

Yet, the anticipation is running high. "If India has to grow at nine per cent, steel consumption growth will be around 13 per cent," said industry representatives.