agenda Global steel industry : Growth and production. Indian steel industry : Structure Demand and supply Companies and the future. Growth and hindrances. Conclusion
Steeling globally During the 20th century, production of crude steel had risen at an astounding rate. Present level of production stands at 800 million tons per year. Steel consumption increases when economies are growing, as governments invest in infrastructure and transport, and build new factories and houses. Economic recession meets with a dip in steel production as such investments falter.
REASONS FOR GROWTH IN GLOBAL PRODUCTION steady increase in price. rising demand for steel domestically and globally. high value for steel shares in the stock market. global mergers and acquisitions. supported by economic growth.
Structure of the indian steel industry The steel industry in India is concentrated in the east, south and west of the country. The integrated foundries are located in the east, while electric steel is produced predominantly in the south and west. The domestic output is insufficient to meet the demand in all segments. The three biggest steelmakers in India have a market share of 51%.
CONSUMPTION IN iNDIA Driven a booming economy and concomitant demand levels, consumption of steel has grown by 12.5 per cent during the last three years from 50.27 MT to 58.45 MT. The per capita steel consumption is only 35 kg in India compared to 150 kg in the world and 250 kg in China. Soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put India's steel industry on the world steel map.
CONSUMERS IN THE MARKET Support from dynamic economy Positive stimuli from construction industry Strong growth in mechanical engineering Booming automobile industry
SUPPLY OF STEEL Over the past ten years India’s crude steel output rose nearly 7%per year to 55.3 million tons. Global crude steel output increased by 4% It equals Ukraine in the 4% global market share. The production is still low as China produces as much as 10 times of India’s production.
Supply demand mismatch YR SUPPLY GRWTH 2003-04 32.81 2004-05 34.70 5.76 2005-06 38.96 12.23 2006-07 41.41 6.29 2007-08 43.278 4.51 2008-09 46.492 7.42 2009-10 54.35 16.91 Firstly, steel consumption is rising very fast as a consequence of the prospective dynamic economic growth. Secondly, there is demand for high-quality products which India will not be able to supply in sufficient quantities for the foreseeable future.
MARKET SHARE OF STEEL COMPANIES COMPANY PRODUCTION OF MARKET SHARE STEEL (IN MN TONNES) (IN TERM OF %) SAIL 13.5 32% TISCO 5.2 11% RNIL 3.5 8% ESSAR,ISPAT,JSWL 8.4 19% OTHERS 14.5 30%
Significance in the future The ArcelorMittal, which is the largest steelmaker in the world, has plans of establishing two Greenfield steel projects with capacity of 12 million tons annually, in India Acerinox SA, one of the important stainless steel manufacturers in collaboration with Nisshin Steel, Japan is setting up a steel plant in India The Tata Steel ranks 5th in the world steel production and the company have plans of expanding its capacity by the year 2015 SAIL, India's biggest producer of steel has plans of increasing the production to 24.98 million tons annually Sinosteel Corp, China are planning to invest US$ 4 billion to set up a 5 million tons capacity Greenfield steel plant The acquisition of the Corus, the Anglo-Dutch steel manufacturer by the Tata Steel The Algoma Steel, Canada was acquired by Essar Global for US$ 1.63 billion
GROWTH OF THE INDUSTRY The International Iron and Steel Institute(IISI) has fore casted that the steel demand will go of from 1.12 billion ton to 1.19 billion ton in 2008. And this will further increase in a higher rate up to 2010. In India the growth will be more prominent because of the growth in Real estate, Aviation, Manufacturing, Automobile sectors.
HINDRANCES FOR THE INDUSTRY Energy supply : - Power shortages hamper production at many locations. Since 2001 the Indian government has been endeavoring to ensure that power is available nationwide by 2012. Problems procuring raw material inputs :- insufficient raw materials and input leading to increase in import costs. Inefficient transport system :- termed as insufficient and inefficient. It lacks quality .
conclusion THE outlook for the global steel industry in 2008 is stable, supported by strong demand from emerging economies amid further consolidation among players worldwide. We can even see several large acquisitions of global steel companies like Corus by Indian steel giants. India’s lower wages and favorable energy prices will continue to promise substantial cost advantages compared to production facilities in(Western) Europe or the US. The growth prospects of the client industries are also very good. The deployment of modern production systems is increasingly enabling India to improve the quality of its steel products and thus to enhance its export prospects.
acknowledgement I thank our professor, Father Xavier who gave us this chance through which we could a learn so much. I thank Father for his guidelines which made this presentation possible. Bibliography :- Google.com, scribd.com, wikipedia.com, economywatch.com, tradechakra.com.
Sumeshsekhar Bba (2nd yr) Roll – 51 Environmental science