Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I am an Engineer with a Master's in Business Administration and have over 27 years of experience working at Senior levels with leading conglomerates such as Hindalco Industries, JSL, JSW, and Stemcor. I am also a Certified Independent Director accredited by the Ministry of Corporate Affairs, Government of India, and currently serve as a Director for a few start-ups. I am currently assuming the position of Vice Chairman of the Indian Institute of Materials Management (IIMM), Nalco Nagar Branch, Bhubaneswar Chapter.
I have expertise in the metals sector, with a strong focus on operations management, general administration, supply chain management, international trade, and logistics. Experience spans strategic planning, business operations, and organizational leadership, enabling effective contribution to both greenfield projects and existing setups.

Q2. What structural shifts are currently reshaping the iron ore pellet and steel raw material markets in India and globally?

Globally, policies like CBAM, i.e., the Carbon Border Adjustment Mechanism (EU), are actively forcing global producers to invest in alternative processing technologies, such as hybrid or low-carbon-emitting systems that utilize renewable power. Geopolitical issues have made the circumstances more complex and dynamic.
The structural shifts that are reshaping the iron ore pellet and steel raw material markets globally include aggressive carbon reduction goals, geographic shifts in steel production, and changing pricing mechanisms. As a result, the market for DRI-grade pellets (High purity) is projected to hold over half of the market share. This growth is heavily driven by hydrogen-ready DRI capacity expansions. Integrated steel plants prefer high-grade pellets, which drastically reduce energy use and carbon emissions. Green premiums are being offered for high-metalized pellets. Like DRI, steelmakers across the globe are relying more on the EAF route than on the conventional BF route. These changes are shifting the entire strategy from conventional energy sources such as coal and petroleum to renewable and other green sources.
Vertical integration, such as steel plants bypassing the merchant market and acquiring steel mines for captive consumption, is the new trend. Heavy investment in the expansion of existing facilities and the addition of new facilities is observed in the value chain.
India will remain the fastest-growing major market due to massive government infrastructure capex for modernization. With a budget allocation of around 11% for Highways and Railways, this is achievable. If we look at data from the the World Steel Association, global steel demand may remain within 0.3% this year, whereas it will be 7.4% for India and may grow exponentially over the coming couple of years. Apart from domestic consumption, Indian players are in the process of expanding their global market share, a process that faces challenges due to green steel norms. Leading steel giants are focusing on green steel production, which requires substantial investment and will take time to achieve.

Q3. How are companies redesigning procurement strategies to improve resilience against geopolitical disruptions and commodity price fluctuations?

Organizations are restructuring their supply chains geographically to minimize exposure to geopolitical choke points. They are diversifying away from single-source dependencies to multi-source by splitting the requirements geographically. This minimizes the risk of availability issues, as sourcing quantities can be adjusted, providing flexibility for the buyer. For critical commodities, buyers enter into contracts with guaranteed production capacity during seasonal periods of lower demand, excluding force majeure conditions.
The China plus one strategy is used to establish secondary supply points by building facilities in countries other than China, such as India, Vietnam, and Mexico. Similarly, sourcing critical materials from stable, politically allied countries that share values can minimize trade barriers. Further, a few buyers are trying to source supply bases near the end consumer to minimize transit time and avoid the risk of maritime chokepoints.
Organizations are trying to address price volatility through proactive financial structuring, such as dynamic indexation, hedging, and strategic stock buffers, though they face challenges due to the current geopolitical situation, which appears temporary.
Large-scale buyers are bypassing traditional mid-tier distributors to secure raw inputs directly at the source through long-term equity investments and offtake agreements. This reduces the number of supply chain disruptions caused by financial shocks at intermediaries.

Q4. What impact are AI and predictive analytics having on procurement planning, inventory optimization, and supplier management?

AI and predictive analytics are shifting procurement from a reactive, administrative function, driven by partially accurate predictions, to an accurate, automated, predictive system, providing greater comfort and a much better cascading effect across subsequent links in the supply chain. Traditional procurement planning was typically based on historical data, whereas AI enables forward-looking demand forecasting. Predictions by humans on local, limited data vary based on intelligence from person to person, whereas AI uses a global supplier database for historical transaction performance, inflation rates, weather forecasts, national policy changes, domestic and overseas customs tariff changes, political stability, and so on. As millions of transactions are analyzed across boundaries within equivalent sectors, AI accuracy is high in most cases. However, full dependence on AI will take more time with further upgrades.
Due to the AI shift and, to a great extent, its accuracy, inventory management has entered a new era. Predictive analysis has helped avoid overstocking and maintain optimal inventory levels, considering yet-to-deliver and yet-to-produce quantities at suppliers’ end. The algorithm considers other factors, such as lead time, transport constraints, port congestion, and strikes, using historical data. This eventually provides a soothing effect on accurate inventory control, improving subsequent forward links in the supply chain, such as production, marketing & sales, logistics, etc.
AI maps not only suppliers but also tier-2 and tier-3 suppliers without bias. As it gathers data from various sources, including social media, the algorithm helps flag issues well in advance and suggests alternative solutions, often with ready solutions. This enhances the efficiency of the procurement division and improves supplier management.

Q5. How is the push toward green steel and low-carbon manufacturing affecting raw material selection and procurement practices?

Push towards green steel and low-carbon manufacturing, essentially restructuring the supply chain to a large extent, affecting raw material selection and sourcing, and revised procurement practices. The traditional procurement model of volume & price has shifted to carbon accounting and monitoring of energy sources. This has become a new way of sourcing due to CBAM's heavy-penalty model.
Due to the above, demand for certain raw materials has risen sharply. For example, the emission in an EAF reduces to more than 85% in case scrap is used, when compared to the iron ore lumps used in a typical blast furnace. Due to this, the Procurement team is restructuring the scrap purchase process to secure long-term scrap availability, making scrap a highly strategic commodity today.
Similarly, blast furnaces traditionally use low-grade iron ore lumps; hence, ultra-high-grade iron ore pellets with very low impurity levels are used to produce green steel. Therefore, procurement practice has shifted from iron ore lumps to high-purity iron ore pellets. Hence, the requirement for high-grade pellets is very high now. Hot Briquetted Iron (HBI) produced with green hydrogen gas is imported from certain countries and melted from renewable electricity.
Likewise, coal, coke, furnace oil, and LDO will be gradually and completely replaced by Natural gas and green hydrogen.
To ensure the supplies are low-carbon compliant, the procurement team is asking suppliers to provide an Environmental Product Declaration (EPD) stating the exact Kg of CO2 embedded per MT of steel. This data has become a condition with an acceptable limit for bidding. Not only that, procurement practices now include an audit of suppliers’ grids to ensure strict green sourcing of power.

Q6. How is the competitive landscape evolving among pellet producers, steel manufacturers, and integrated metal companies?

As the push towards decarbonization intensifies, the boundaries between primary steel plants and secondary steel firms are becoming thinner due to a more interconnected, vertically integrated supply chain. Due to a shortage of high-purity raw materials, the competitive landscape is shifting power dynamically among pellet producers, steel manufacturers, and integrated majors.
The DR-grade pellets with high purity (more than 67%) and ultra-low silica and alumina impurities are in high demand for hydrogen-based DRIs. As these deposits are scarce, pellet producers like VALE, Brazil, or LKAB, Sweden, are now pioneers in clean pellets. Further, many merchant pellet producers are pursuing forward integration by siting DRIs near cheap renewable energy sources (in the Middle East and Australia) and exporting these low-carbon iron briquettes globally.
Standalone Steel manufacturers are suffering as steel majors adopt the EAF route and gain an edge in controlling the scrap market. Acute competition has been making them sick gradually. As the required capex is huge, these plants are going to face extreme difficulties and may, wherever possible, go bankrupt or be taken over.
Integrated majors are bypassing merchant vendors completely. Either they are forming a JV or buying stakes in high-grade iron ore mines and green hydrogen sources. They are locking in long-term supply agreements for premium pellets and avoiding volatility. Some of the companies are building facilities for DRI, Pellet, EAF, and green hydrogen production within a single complex to reduce the carbon footprint associated with logistics and marine transport. In the future, these players will take control of the low-carbon supply chain and will demand a premium for offering Net-Zero-Steel.

Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?

Questions could be:
•    What is the proposed roadmap to achieve zero carbon by 2034, and the spend estimate, and its milestones?
•    To what extent does the current export portfolio comply with the required green steel classification of less than 1.6 tCO₂e per MT of steel?
•    As demand for scrap has risen due to current EAF consumption and capacity enhancements, creating a structural shortage of scrap, what measures are being taken to safeguard future requirements?
•    High-grade pellets >67% are manufactured by fewer than 10% of manufacturers globally; hence, what is the roadmap to improve quality from the typical 64% or less? What are the expected timeline and spend? What would be the per MT processing cost of the HG pellets?
•    In the case of merchant pellet plants, what is their plan for forward integration into Hot briquetted iron, and what time & spend are involved??
•    How would the price of green hydrogen be competitive with fossil fuels? What is the proposal on this? Where the green hydrogen would be sourced, and, in the long run, how to source it from nearer points or captive sources. Detailed roadmap and spend/time projections required.
•    For Indian farms, what policy changes by GoI do they expect to ease business, and what spending volume have they set aside as a contingency?
•    What is the plan for carbon credit management until the goal is achieved, and what is the spend projection??