Presentation by Ram Prasad                 01/08/2007ramprasad2020@yahoo.com                              1
Indian Metals Market- Overview Key sector – vital to Indian Economy meets wide range of industries- Engineering, Infrastru...
Indian Metals Market- Overview  Non- Ferrous Metals- Copper/Aluminium / Zinc/ Lead/ Tin/ used for making alloys, castings,...
Industry Dynamics Indian Ferrous industry- comprises of- Miners & Producers- engaged in mining & extracting activities Ind...
Drivers & Trends Steel Sector Significance- India’s steel industry is significant, even by global standards. With an insta...
Drivers & Trends  Ore Miners- Mining companies are engaged in mining iron ore , key players – NMDC/ KIOSL/ Sesa Goa Main P...
Drivers & Trends Flat Products- includes the famous- HRC Coils ( Hot Rolled Coil Sheets)/ CRC- Cold Rolled Coil Sheets… Lo...
Drivers & Trends Drivers & Trends-Metals- Aluminium Aluminium – India accounts for nearly 10 per cent of the world’s bauxi...
Drivers & Trends- Metals- Copper Copper- One of the key sector impacting the Indian economy. Utilities- Telecom/ Power/ Co...
Drivers & Trends- Metals- Copper Major Players- Sterlite/ Hindustan Copper Limited/ Hindalco/ Three major players control ...
Drivers & Trends- Metals- Zinc Key Players- Hindustan Zinc Ltd, part of Sterlite Group. Domestic Demand- 400,000 tones per...
Drivers & Trends- Exports  India – net exporter of steel around $3.3 billion, in 2006-07.  Major areas of export-    China...
Drivers & Trends- Imports Major steel import destinations are- BRICS / Germany/ Korea/ In non-ferrous metals, India is net...
Business Confidence – MetalSector FDI continued to get attracted in metallurgical sector since, 1991. During the phase of ...
Competitive Index          • India’s cheaper labor       India’s cheaper workforce          market backed with skilled    ...
Michael PorterCompetitive IndexIndia growth oriented marketFavorable conditions for productionSupport from allied industri...
Key Players Hindustan Copper Ltd- PSU- Exploration – Mining- Smelting- Plants at- Rajasthan/ Jharkhand Ispat Industries- s...
Future Perfect Future outlook - Metals sector in India is shining bright Indian Economy poised to grow at 8-10%GDP for nex...
Thank You  Ram PrasadF 21 Meenakshi ResidencyArekere, Baneerghata RoadBangalore 560076ramprasad2020@yahoo.com             ...
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Indian metal sector-_futuristic_perspective

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Indian metal sector-_futuristic_perspective

  1. 1. Presentation by Ram Prasad 01/08/2007ramprasad2020@yahoo.com 1
  2. 2. Indian Metals Market- Overview Key sector – vital to Indian Economy meets wide range of industries- Engineering, Infrastructure, Electrical and Automobile … Metal Industry can be classified under- Ferrous/ Non- Ferrous Metals. Ferrous Metals – mainly consists of – Iron/ Steel – Indian Steel Industry Story is much of the global headlines- eg: Mittal’s acquisition of Arecelor, France…. Steel Industry accounts for close to 2% Indian GDP and brings in excess of 10% of revenues through- Excise Duty and employs more than 1 million directly and indirectly. 2
  3. 3. Indian Metals Market- Overview Non- Ferrous Metals- Copper/Aluminium / Zinc/ Lead/ Tin/ used for making alloys, castings, forgings & extrusions … Non Ferrous Metals – used widely in agriculture/ infrastructure/ power plants/ railways/ telecommunications/ core sector… Industry is highly fragmented- organized/ unorganized across ferrous and non- ferrous groups. 3
  4. 4. Industry Dynamics Indian Ferrous industry- comprises of- Miners & Producers- engaged in mining & extracting activities Indian iron ore mines are seen across- Jharkhand/ Orissa/ West Bengal/ Karnataka/Chattisgarh Producers – are classified - Integrated Steel Producers ( ISS)and Secondary Producers. Integrated Steel Producers- Tata Steel/ SAIL/ ISS occupies close to two thirds of Indian Crude Steel Producing… Secondary Producers- forms the other one- third of the steel production, but they are under both organized and un organized segments. Greater fragmentation, greater the competition. 4
  5. 5. Drivers & Trends Steel Sector Significance- India’s steel industry is significant, even by global standards. With an installed capacity of 36.12 million tones, India is the eighth largest steel producer in the world. The industry has presence across all sectors – ore miners, integrated producers and other producers 5
  6. 6. Drivers & Trends Ore Miners- Mining companies are engaged in mining iron ore , key players – NMDC/ KIOSL/ Sesa Goa Main Producers- can be classified based on – Production Process/ Types of Products manufactured by the producers. Production Process- producers use three types of processes for converting iron ore into steel to coke oven- BF/ BOF route/ electric arc furnace ( EAF rout.e) or corex process Product based Manufacturing- Products-Long Products / Flat Products Long Products- bars, structural products, wire rods, angles, rounds – Mainly used in Construction/ Infrastructure industry. 6
  7. 7. Drivers & Trends Flat Products- includes the famous- HRC Coils ( Hot Rolled Coil Sheets)/ CRC- Cold Rolled Coil Sheets… Long Products Players- RINL SAIL/ Tata Steel/ Flat Products- Ispat/ Jindal / Bhushan Steel- widely used in white goods/ automobile sector/ fabrications/ ducts / roofing/ 7
  8. 8. Drivers & Trends Drivers & Trends-Metals- Aluminium Aluminium – India accounts for nearly 10 per cent of the world’s bauxite reserves. Domestic Demand is expected to grow annually – CAGR 8- 10 per cent in 2005- 06 and by 2020, India is expected to have an installed aluminium capacity of 1.7 to 2 million tones per annum. The primary market for aluminium in India is the power sector, which consumes about 35 per cent of the domestic production. Key Drivers- The ongoing reforms in the power sector and focus on improving power infrastructure, is expected to further boost the aluminium sector in India. 8
  9. 9. Drivers & Trends- Metals- Copper Copper- One of the key sector impacting the Indian economy. Utilities- Telecom/ Power/ Construction/ Engineering/ Consumer Durables. According to Ministry of Steels, GOI, the installed capacity in 2003-4 is 477,500 vs. domestic demand about 290,000 tones. Nearly 40% of copper is exported. Potential for Huge Demand- across ASEAN regions/ South Asia/ SL etc 9
  10. 10. Drivers & Trends- Metals- Copper Major Players- Sterlite/ Hindustan Copper Limited/ Hindalco/ Three major players control more than 85% of market share, while the rest is controlled by small scale industries who are primarily converting scrap into ingots. Products- Copper bars/ rods/ wires… Correlation Effect- Highly dependent on- Telecom/ Power sector Growth- CAGR of 5-6% is growth witnessed for last 20 years, with Indian economy peaking around 7-8% GDP for most of 2004-7, the outlook for copper is positive. 10
  11. 11. Drivers & Trends- Metals- Zinc Key Players- Hindustan Zinc Ltd, part of Sterlite Group. Domestic Demand- 400,000 tones per annum, annual CAGR of 5-6% on Y- Y basis. Domestic Markets- Zinc is predominantly used in Steel Industry for galvanizing, die-casting, guard rails used in railways Key Driver- Continuing demands from Construction industry- creates multiplier effects for steel& zinc products… 11
  12. 12. Drivers & Trends- Exports India – net exporter of steel around $3.3 billion, in 2006-07. Major areas of export- China- 24% US- 8% UAE- 5% Thailand- 5% Italy – 4% Iran – 4%Indian exports consists mainly carbon steel which accounts for 95% of steel exports, rest being the pig iron. 12
  13. 13. Drivers & Trends- Imports Major steel import destinations are- BRICS / Germany/ Korea/ In non-ferrous metals, India is net exporter of copper and net importer of zinc Opportunity- Given the surplus production of metals and requirements in other markets gives greater opportunity for growth in exports for Indian metals 13
  14. 14. Business Confidence – MetalSector FDI continued to get attracted in metallurgical sector since, 1991. During the phase of 1991-2005 phase- FDI in metallurgical sector accounted to - $4.5bn 14
  15. 15. Competitive Index • India’s cheaper labor India’s cheaper workforce market backed with skilled workforce are advantages and skilled low cost for setting up- workforce is production domestic bases • Liberal policy regime • Foreign equity is allowed 100% in FDI under automatic conditions advantageous to create low- for local and international Indian competitive index is illustrated by Michael cost production bases for markets. both local & international Porter’s Competitive Analysis: markets strategy/ Factor Firm Conditions structure Related & Demand Supporting Conditions Industries • Matured industry • Users- constructions/ automobile/ engineering/ • Highly demanding consumers • Demand and industry growth high correlation 15
  16. 16. Michael PorterCompetitive IndexIndia growth oriented marketFavorable conditions for productionSupport from allied industriesGovernment- Policy enabling climate for Metalindustry. 16
  17. 17. Key Players Hindustan Copper Ltd- PSU- Exploration – Mining- Smelting- Plants at- Rajasthan/ Jharkhand Ispat Industries- sponge iron- HCR- Plants at- Kalmeshwar SAIL- manufactures steel for domestic consumption, Plants- Salem/ Badravathi/ Rourkela 17
  18. 18. Future Perfect Future outlook - Metals sector in India is shining bright Indian Economy poised to grow at 8-10%GDP for next 20 years, the demand is very clearly defined- increased infrastructure- construction- engineering – automobile sector headed for bullish phase- young demographics- higher potential to spend and consumption Greater shortages in worldwide copper supplies are expected to continue due to production cuts by leading producers in Mexico and Chile. Opportunity Management- Utilizing the demand and production cuts in Mexico/ Chile, augurs well for Indian Metal industry in the near and long term. 18
  19. 19. Thank You Ram PrasadF 21 Meenakshi ResidencyArekere, Baneerghata RoadBangalore 560076ramprasad2020@yahoo.com 19

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