This document provides an overview of the Indian steel industry. It discusses that India is the 5th largest steel producer globally. The industry has seen growth in recent years but faces issues like dependence on coking coal imports and low research and development investment. The major players in the industry are SAIL, Tata Steel, and JSW Steel. The industry is expected to continue growing to meet rising demand from construction and infrastructure development. Reaching higher production targets and addressing challenges like coal supply will be key to the future outlook of the Indian steel sector.

1. STEEL INDUSTRY ANALYSIS
 JOSNI JOSEPH
 AMIT SINGH
 TEJDIPSINH

2. AGENDA
 Industry Overview
 Industry Value chain & Structure
 Market size and Growth
 Industry Growth and segment
 Major players and Competition
 Technology
 Regulation
 Issue and Concerns
 Growth Drivers
 Outlook

3. Industry Overview
 Production wise India accounts 3.93% of total steel production
globally.
 India is a 5th largest steel producer globally and china at first position.
 Steel industry contribution to GDP is 1.2%.
 Currently India has 59.58mt installation Capacity for 2008-09.
 The growth rate of 1.23% over last year with capacity utilisation at
89%
 The exports decreased by 26% at 3.77mt while imports decline 18%
at 5.77mt for 2008-09.
 The steel industry is expected to achieve a steel production Capacity
of nearly 124mt by year 2011-12.
 Steel sector is expected to generate additional employment of
around 4 million by 2020.

4. Global Scenario
World steel production
 Global crude steel production
reached 1.33bnt in 2008.
600
 China is the largest producer 500
with 502mtn with 2.06% 400
growth.
mn. tonnes
300
 India may become second 200
largest steel producer in the 100
world by 2015. 0
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5. Steel making process
Iron ore Fluxes Coal
Sinter plant Coke plant
Blast Furnace
LD1 LD2
Slab caster Continuous billet caster
Slabs
Hot strip mill Cold strip mill Billets Merchant mill Wire mill

6. Market size and Growth
 Production of steel
gradually increases
 The industry is 60%
Steel production and Growth rate
organized.
60000 14
 Per Capita steel 12
50000
consumption is 45 kgs,
'000 tonnes
40000 10
8
leaving scope for 30000
%
6
20000
further increase in 10000
4
2
production. 0 0
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Production Growth rate
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7. Segments of steel
 Technology:
 Basic oxygen furnace
 Electric arc furnace
 Induction furnace
 Products
 Flat iron
 Long iron
 Value chain
 Integrated steel producers
 Secondary steel producers
 Customers
 Construction
 Transport equipment
 others

8. Major Players
Sales of Top Ten Players For The Year 2008-09
• In India, Public Sector 600
companies contributes 32% 400
of total production.
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• SAIL,Tata steel and JSW
0
Tata Steel SAIL JSW RINL ISPAT Bhushan Steel Uttam Steel Lloyds Steel Essar Steel Mukand Ltd
Ltd. Ltd.
steel are major three
players. Sales (Rs. Bn)
• The market leader as per
installed capacity is SAIL
with capacity of 15.2 Mt
• Tata steel is the 2nd largest
player after SAIL.
www.steel.nic.in

9. Herfindal Index
Company Net sales Market share Index value
TATA STEEL 253950 55.03 3027.828
SAIL 100391 21.75 473.172
ISPAT 20480 4.44 19.691
JSW 47565 10.31 106.221
BHUSHAN 12985 2.81 7.916
BSL LTD. 546.4 0.12 0.014
STEEL CO OF GUJRAT 1142.8 0.25 0.061
JSPL 24453 5.30 28.073
TOTAL 461512 3662.976
It implies that the competition in the steel industry is medium to high and
with high concentration.

10. Michel Porter Analysis
 Threat of Entry: Low to moderate
 Bargaining power of Buyer: Moderate to high due to high
competition
 Bargaining power of Supplier: Moderate to high

 Threat of substitute: Low
 Competitive Rivalry: Moderate to high but compared to
other industry its still low

11. Technology
• Two main Technology used: Basic
Arc furnace and Electric Arc
Furnace Crude steel production by Process Route
• Cost competitiveness & quality
improvement initiatives
Induction
• Auto operation of blast furnace Furnace(IF)
Basic Oxygen
charging conveyors resulting in 33%
Furnace(BOF)
47%
downtime of conveyors& increase
Electric Arc
in Hot metal production Furnace(EAF)
20%
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12. Regulation
 Currently 100% FDI allowed.
 Trade policy has been liberalized
 Excise duty cuts to 8 %, Import duty cuts to 5%
 Full utilization of ppp(public, private, partnership) in development of
infrastructure
 Govt. policy allows private capital in port development so that steel
producers would be encouraged to develop port and berth facilities
so as to improve steel productivity

13. National Steel Policy 2005
 To enhance the indigenous steel production to 110 MT per annum by 2019-20 from
the 04-05 level of 38MT, implying a compounded annual growth rate of 7.3%.
 To boost steel consumption in the rural areas.
 Developing of risk-hedging instruments like futures and derivatives to contain price
volatility in the steel market.
 To strengthen the existing training and research facilities available to the domestic
steel industry.
 Protection of industry from unfair trade practices resulting in integration of the Indian
and global industry especially in periods of downturn.
 To boost exports govt. will support all efforts to make available export credit, provide
trade information, and cut transaction costs in general.

14. Issues and Concerns
 Unscientific Mining
 Coking coal import dependence
 Low R&D investment
 High cost of Debt
 Inadequate Infrastructure
 Low productivity
 China becoming the net exporter

15. Growth Drivers
 Key Growth Drivers: Construction, Automobiles, Infrastructure,
Consumer durable, oil and Gas.
 Huge source iron ore, Cheap Labour, quality man power.
 Mostly Steel plants are located near the Raw material Sources.
 Reduction in custom duty in respect of non-alloy steel production.
 The Counter Vailing Duty on the TMT roads and bars reduced from
14% to Nil.
 The ministry of steel has approved 59 R&D projects costing Rs.408
crores, which work on:
 Merger and Acquisition has evolved to be one of the major growth
drivers in the industry leading to economic of scale.

16. OUTLOOK
 Indian Steel Co. acquiring stakes in the foreign firms to become
global leaders.
 Target to achieve an export ratio of around 25% of total production.
 Target of 110mT by 2020.
 Demand in automobile and infrastructure will lead to growth in steel
industry
 Per capita consumption is 40 kg compare to 150kg globally, which
has potential ahead.
 Shortage of Cocking coal will be huge challenge.
 World steel demand to double in next 25 years, a huge opporunities
for the steel industry.
 Upcoming Budget certainly will have great impact on steel industry
future.

17. Thank