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Iorn and steel industry

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  • 1. GLOBAL STEEL SCENARIO • Globally Steel is considered as a cyclic industry. • After last recession, Global Steel Industry has been consolidating its position and has been marked by many mergers and acquisitions. • Appetite for steel by China has been the driving force of the growth in production/consumption of Steel. • Further growth in production/consumption is expected to come from BRIC countries (Brazil, Russia, India and China). • Cost/Availability of raw materials (mainly iron ore & coal) – a major challenge. www.StudsPlanet.com
  • 2. STEEL PRODUCTION www.StudsPlanet.com
  • 3. LIST OF COUNTRIES BY STEEL PRODUCTION www.StudsPlanet.com
  • 4. World Steel Industry – Top Ten Source: IISI 9 4 8 3 2 S. Korea 53.6 mT 5 6 Italy 30.6 mT 10 Germany 45.8 mT Ukraine 38.6 mT 7 USA 91.4 mT Russia 68.5 mT Brazil 33.7 mT 1 China 502 mT Global crude steel Production: 1326.5 million tonnes (mT) Japan 118.7 mT www.StudsPlanet.com
  • 5. CRUDE STEEL PRODUCTION (MILLION TONNES): Rank Country/Region 2007 2008 2009 2010 2011 — World 1,351.3 1326.5 1,219.7 1,413.6 1,490.1 1 People's Republic of China 494.9 500.3 573.6 626.7 683.3 2 Japan 120.2 118.7 87.5 109.6 107.6 3 United States 98.1 91.4 58.2 80.6 86.2 4 India 53.5 57.8 62.8 68.3 72.2 5 Russia 72.4 68.5 60.0 66.9 68.7 6 South Korea 51.5 53.6 48.6 58.5 68.5 7 Germany 48.6 45.8 32.7 43.8 44.3 8 Ukraine 42.8 37.3 29.9 33.6 35.3 9 Brazil 33.8 33.7 26.5 32.8 35.2 10 Turkey 25.8 26.8 25.3 29.0 34.1 11 Italy 31.6 30.6 19.7 25.8 28.7 12 Taiwan 20.9 19.9 15.7 19.6 22.7 13 Mexico 17.6 17.2 14.2 17.0 18.1 14 France 19.3 17.9 12.8 15.4 15.8 15 Spain 19.0 18.6 14.3 16.3 15.6 www.StudsPlanet.com
  • 6. WORLD RAW STEEL PRODUCTION BY REGIONS www.StudsPlanet.com
  • 7. www.StudsPlanet.com
  • 8. IRON MAKING • For iron making, the essential feature is the blast furnace, where iron ore is melted (reduced) to produce pig iron. The furnace is charged from the top with iron ore, coke and limestone; hot air, frequently enriched with oxygen, is blown in from the bottom; and the carbon monoxide produced from the coke transforms the iron ore into pig iron containing carbon. The limestone acts as a flux. At a temperature of 1,600°C the pig iron melts and collects at the bottom of the furnace, and the limestone combines with the earth to form slag. The furnace is tapped (i.e., the pig iron is removed) periodically, and the pig iron may then be poured into pigs for later use (e.g., in foundries), or into ladles where it is transferred, still molten, to the steel- making plant. www.StudsPlanet.com
  • 9. Steel making • Pig iron contains large amounts of carbon as well as other impurities (mainly sulphur and phosphorus). It must, therefore, be refined. The carbon content must be reduced, the impurities oxidized and removed, and the iron converted into a highly elastic metal which can be forged and fabricated. This is the purpose of the steel- making operations. There are three types of steel-making furnaces: the open-hearth furnace, the basic-oxygen process converter and the electric arc furnace . Open- hearth furnaces for the most part have been replaced by basic-oxygen converters (where steel is made by blowing air or oxygen into molten iron) and electric arc furnaces (where steel is made from scrap iron and sponge-iron pellets). www.StudsPlanet.com
  • 10. INDIAN STEEL INDUSTRY www.StudsPlanet.com
  • 11. Tata Steel RINL SAIL Mittal POSCO JSPL Essar Bhushan MMK JSW Ispat Sterlite Proposed state-wise capacity additions upto 2012. J’khand: 34 mtpa W Bengal: 4 mtpa Ch’garh: 9 mtpa Orissa : 38 mtpa AP: 3.3 mtpa Karnataka: 9.7 mtpa www.StudsPlanet.com
  • 12. INDIA - PRESENT STATUS AND FUTURE PROJECTIONS World Ranking in Production : 4th World Ranking in Consumption : 3rd Projected Capacity by 2016-17 : 150 MT Projected Capacity by 2019-20 : 200 MT Projected Capacity by 2030 : 500 MT Indian Steel Production is bound to grow manifold in years to come to sustain Growth in infrastructure /Construction, Automotive , Capital Goods and Consumer Durable Sector i.e economic growth . www.StudsPlanet.com
  • 13. Skilled Human Resources Abundant Iron Ore Government Policy Huge Potential for Demand • High GDP growth rate of 7% • 1 billion population • Low per capita steel consumption of 33kg (World av. 181 k Reserves 23 billion tonnes • Stable currency • Easing of regulations • Strong Banking & judicial system Growth factors for India •Encouraging trade relations with ASEAN and other countries • Infrastructure building • Exploring new Energy resources Indian Potential for Steel www.StudsPlanet.com
  • 14. STEEL - PRODUCTS www.StudsPlanet.com
  • 15. www.StudsPlanet.com
  • 16. SWOT ANALYSIS OF INDIAN STEEL INDUSTRY STRENGTHS •Abundant resources of iron ore •Low cost and efficient labour force •Strong managerial capability •Strongly globalised industry and emerging global competitiveness •Modern new plants & modernised old plants •Strong production base •Regionally dispersed merchant rolling mills WEAKNESSES •High cost of energy •Higher duties and taxes •Infrastructure •Quality of coking coal •Labour laws •Dependence on imports for steel manufacturing equipments & technology •Slow statutory clearances for development of mines www.StudsPlanet.com
  • 17. SWOT ANALYSIS OF INDIAN STEEL INDUSTRY OPPORTUNITIES •Huge Infrastructure demand •Rapid urbanisation •Increasing demand for consumer durables •Untapped rural demand •Increasing interest of foreign steel producers in India THREATS •Slow growth in infrastructure development •Market fluctuations and China’s export possibilities •Global economic slow down www.StudsPlanet.com
  • 18. MICHAEL PORTERS FIVE FORCES ANALYSIS Buyers’ Power • Increasing Demand for Steel • Fragmented Coke Suppliers Suppliers’ Power • High Raw Material Prices • Lack of Captive Source Hurting Steel Producers • Lack of Transportation • Backward Integration Intensity of Competition • Competition from Foreign Players • Spurt in Merger and Acquisition Activities Threat of New Entrants • High Cost of Basic Inputs and Services Threat of Substitutes • Use of Aluminum/Plastic www.StudsPlanet.com
  • 19. PEST ANALYSIS Political Factors • National Steel Policy to Remove Bottlenecks Economic Factors • GDP Growth Rate • Reduction in Customs Duty Social Factors • Rural-Urban Divide • Higher Disposable Income Technological Factors • Popularity of Steel Portals • Application of SML (Steel Markup Language) www.StudsPlanet.com
  • 20. TOP PLAYERS • ArcelorMittal • Nippon Steel • Baosteel Group • POSCO • Hebei Steel Group • JFE • Wuhan Steel Group • Tata Steel • Jiangsu Shagang Group • U.S. Steel Source: World Steel Association www.StudsPlanet.com
  • 21. OTHER MAJOR STEEL PRODUCERS •Tisco •JSW •Essar Steel •RINL •MECON •MOIL •MSTC •KIOCL •NMDC www.StudsPlanet.com