← Critical Product/Equipment/Process: Metals, Mining & Materials (all topics)
Induction furnace route
What it is
The secondary steel route - melting scrap and sponge iron in an induction furnace, casting billets and re-rolling them into TMT bars, as opposed to the primary route of making steel from iron ore in an integrated plant
It needs a fraction of the capital of a blast furnace, which is why India's TMT market is served by hundreds of regional secondary mills alongside a handful of primary producers
Impact on industries
- Low capital intensity and short build time allow regional players to serve local construction demand without integrated-plant economics
- Scrap and sponge iron feed is flexible - a mill can shift between inputs on relative price, which an ore-based route cannot
- Power is a dominant cost and entirely exposed to tariff and availability, so secondary mills are squeezed whenever energy costs rise
- No captive ore or coal, so the mill is a price-taker on both sides, and quality trails primary steel - which is why secondary TMT trades at a discount