Editorial – February 2022
In the last two decades or so, due to faster, seamless and smooth communication, the world has surely come closer. Thanks to internet and its various tools, we can know about almost everything about almost anywhere on this planet and even beyond. Great feeling !
Obviously this has translated in the business environment too and today international trade is not as difficult as it was in the last century. Of course, there are other challenges like quality, price etc. thus keeping the trade extremely competitive. The supply chain of most of the mega corporate is spread over not countries but various continents. Even the markets are truely global. This strategy surely helps in building world class products and also due to spread out markets, required sustainability is achieved. Stretching this logic further, the effect of one country’s or region’s economy, positive or negative, is bound to be felt in other nearby countries and regions. So to say, today no country can progress or go through a depression in isolation. Rest of the world would surely feel the tremors.
Today, we are witnessing a war between Russia and Ukraine. It is going on for more than three weeks and there is a likelihood that it will not only extend but also spread elsewhere. As such the global situation remains quite delicate and the world leaders are busy trying to figure out a solution of this crisis. As we all know, Russia and Ukraine both export finished steel as well as semis in huge quantity. All this has nearly stopped due to this ongoing war. Even the prices of almost all the raw materials of steel have shoot up since the outbreak of the war. How can the finished steel prices remain stable ? They are bound to surge. Also the hike in petrol / diesel prices will surely have a cascading effect on the industry and finally on the consumer. Thus along with the global economy, the fortune of steel industry too is tied up with such events and the whole world suffers from any irresponsible act by anybody in any corner of the world. This is the unfortunate part of globalization, the other side of the coin.
Fortunately India is not too much dependent on other countries for the steel raw materials except for coking coal, nickel and few types of refractories. Also, most of the domestically produced steel is consumed in the country itself. Thus in my opinion, India would feel the heat of the war but in a milder way. Let us hope this war crisis ends soon and the world economy resumes its normal peaceful functioning !