*ArcelorMittal and Nippon Steel (AMNS)’s Indian JV is set to commission its 2mn tonnes a year (mtpa) auto-grade steel capacity.* This will be live by March, and will (hopefully) bring down the cost of auto-grade steel in India. Let me explain. .. *First, some brief on the market landscape.* Today, we are in a market JSW Steel claims to house India’s largest auto-grade steel facility. -> That is based in Vijayanagar in Karnataka, with a capacity of 2.3mtpa -> And this one has been aggressively competing with Tata Steel, which is the No.1 player in this niche steel segment -> And overall, these two presently meet much of the Indian market’s need for auto-grade steel, with some 15-18% of the remaining demand being met via imports Of that 15-18%, some bit is consumed by Hyundai and Kia, which preferably import steel from Seoul-based parent’s steelmaking units in South Korea. .. *Now, AMNS, which acquired Essar Steel in 2019 comes into the picture.* Some time ago, AMNS began the expansion of the capacity at the Hazira, Gujarat-based massive integrated steel plant. This involved an overall investment of $7.4bn to scale the capacity from 8.6mtpa to 15mtpa. And of this, $1bn investment was for a $2mn auto-grade steel capacity. It’s that which is going live in March! .. *Now, the interesting thing is that the company has claimed that this will help India substitute the 15-18% of the demand which is met with imports.* And while import substitution will surely happen, a capacity of 2mtpa is too big for that. Thus, if it’s to be well utilised, competition with Tata and JSW Steel for business from their existing clientele will be inevitable. And, that could create a buyer’s market in this niche segment, playing positively for the automakers. What do you think? .. *Support my work:* https://t.ly/SUPPORTjay *Check my work with:* - 3.1k+ on Decoding The Dragon (https://t.ly/chnwj) - 2.7k+ on Deepdives with Jay (https://t.ly/dwj) - 2.1k+ on BharatNama (https://t.ly/bwj) Best, Jayant Shilanjan Mundhra