The document discusses the steel industries of China and India. It provides the following key points: - China is the world's largest producer and consumer of steel, but production growth slowed in 2012 due to declining demand. Excess capacity has led to falling steel prices. - Both countries have abundant raw materials and labor as strengths, but India struggles with low productivity and China faces constraints on resources. - Opportunities for growth include increasing domestic demand, exports, and infrastructure development. Threats include rising prices of iron ore and coal, and China potentially dumping excess steel. - The five largest steel producers globally are all Chinese companies, demonstrating China's dominance of the industry. Internal competition is high within

1. INDIAN AND CHINESE STEEL
INDUSTRY AT A GLANCE

2. STEEL INDUSTRY-CHINA
 China's crude steel output grew 3.1 percent to 716.54 million tons in
2012, down 5.8 percentage points from a year earlier.
 The steel industry faced an extremely difficult situation in 2012, as an
economic slowdown in China and the rest of the world curtailed
market demand and resulted in flagging steel prices.
SLOW DOWN IN STEEL INDUSTRY
 Slowing economic growth has decreased steel demand from
downstream industries, such as the railway construction, property
development and shipbuilding sectors.
 China's steel sector still has excessive production capacity, which has
caused steel output to greatly exceed market demand.
 As a result, steel producers competed fiercely to boost their
sales, which in turn resulted in steel price decreases.
1 September 20132
Indian and Chinese Steel Industry at a Glance
FIIB

3. OVER SUPPLY OF STEEL
• China's steel demand will rise 3.1 % in 2013-14 as the Govt. measures
to stabilize
growth pick up steam, the China Iron and Steel Association, or CISA.
• Iron and steel demand this year will be better than last year but prices
will not improve significantly due to overcapacity and oversupply.
• Steel prices climbed for three consecutive weeks in January. By the thir
d week of January, steel
prices had reached its peak since the second half of 2012.
• China's crude steel output in 2012 was 720 million tons, up 3.1 percent
year-on-year, according to the National Bureau of Statistics said.
1 September 20133
Indian and Chinese Steel Industry at a Glance
FIIB

4. TOP FIVE STEEL COMPANIES OF THE
WORLD & CHINA
Sl.no Across the world China
1 Arcelor Mittal (
Luxembourg) --97.2 MT
Habei Iron and Steel -
-44.4 MT
2 Habei Iron and Steel (
China)--44.4 MT
Baosteel Group
--43.3MT
3 Baosteel Group ( China)
--43.3MT
Wuhan Iron and Steel
-- 37.7 MT
4 POSCO (South Korea)
--39.1 MT
Jiangsu Shagang –
31.9 MT
5 Wuhan Iron and Steel (
China)--37.7 MT
Shougang – 30.0 MT
1 September 20134
Indian and Chinese Steel Industry at a Glance
FIIB

5. Comparison Between Indian and Chinese
Steel Industry
Indian Steel Industry
Chinese Steel
Industry
 Availability of Iron ore and
Coal
 Low labor wage Rates
 Abundance of quality
manpower
 Availability of the raw
material
 Abundance of manpower
 Continuous flow of F.D.I’s
 More mature and efficient
production base compared
to India
STRENGTHS
1 September 20135
Indian and Chinese Steel Industry at a Glance
FIIB

6. WEAKNESS
Indian Steel Industry
Chinese Steel
Industry
 Unscientific mining
 Low productivity
 Coking coal import
dependence
 Low R & D investments
 High cost of Debt
 Inadequate Infrastructure
 Short supply of domestic
steel products
 China is restricted by the
factors like
resources, energy and
environment
 High end products having
weak international
competitive strength (
because of using obsolete
technology)
1 September 20136
Indian and Chinese Steel Industry at a Glance
FIIB

7. OPPORTUNITIES
Indian Steel Industry
Chinese Steel
Industry
 Unexplored Rural Market
(65-70% of Indian population
resides over here)
 Growing Domestic Demand
 Growing Exports
 Mergers and Acquisitions
 Strong inflow and outflow of
FDI’s
 Infrastructure Development
 Modernization of its steel
plants would give a boost to
its steel industry and
economy as whole
1 September 20137
Indian and Chinese Steel Industry at a Glance
FIIB

8. THREATS
Indian steel Industry
Chinese Steel
Industry
 China becoming net
exporter
 Threat of substitutes and
technological change
 Slow industrial growth
 Dumping of steel by
developed countries
 Price sensitivity and
demand volatility
 Growing worker shortage
threaten china’s low-cost
advantage
 Increasing iron-ore prices
 Shortage of coal in the future
1 September 20138
Indian and Chinese Steel Industry at a Glance
FIIB

9. STEEL PRODUCTION APRIL-MARCH 2011-
12
1 September 20139
Indian and Chinese Steel Industry at a Glance
FIIB

10. PORTER OF CHINA STEEL INDUSTRY
Threat of
new
Entrant
Bargaining
power of
Buyer
Threat
of
Substitu
te
Bargaining
power of
Supplier
Rivalry
among
existing
competitor
s
1 September 201310
Indian and Chinese Steel Industry at a Glance
FIIB

11. Bargaining Power of Buyer:-
 Increase in domestic competition and over capacity has enabled more
options for buyer.
 Product differentiation is low. Thus buyer can opt for cheapest cost, but
Chinese govt. will not allow unbridled competition.
 Also buyer buying in bulk have greater negotiating power.
 Also they are exporting steel at cheaper rate suggest that buyer have
an upper edge.
Bargaining Power of Supplier:-
 China has abundance of iron ore and coke but the demand in industry
exceeds country ability to meet it.
 Thus supplier has an edge over here but importing on high scale cut
down the price plus the economies of scale on production line helps to
compensate.
 Technology is not a big issue over here as they are quite capable and
leaders in the industry.
 Rising energy cost is one such problem effecting the output cost.1 September 201311
Indian and Chinese Steel Industry at a Glance
FIIB

12. Threat of New Entrant:-
 Huge capital industry. Also product is not differentiated.
 Low access to raw material for every new player.
 Difficult to achieve economies of scale in short duration.
 Also industry is overcapacity thus govt. will not allow new player to
enter.
Threat of Substitutes:-
 No primary substitute. Some of important industry like
armor, shipbuilding, automotive, construction.
 Few of other substitutes may be in form of plastic, wood, and some
other indigenous product.
 As China is growing steel production and usage also seems to grow.
Its utility can not be marginalized it is just one can switch to other
manufacturer but the overall usage still remains intact.
1 September 201312
Indian and Chinese Steel Industry at a Glance
FIIB

13. Internal Rivalry:-
 High competition in domestic market.
 The product is also same across thus increases the competition.
 Also coupled with the near commodity nature of the output, firms are
forced to focus on efficiency and cost minimization.
Thus overall:-
 Buyer Power- Medium-High.
 Supplier Power- Low – Medium.
 Internal Rivalry- High.
 Threat from Substitutes- Low.
 Threat from New Entrants- Low.
1 September 201313
Indian and Chinese Steel Industry at a Glance
FIIB

14. CONCLUSION
 The Chinese steel industry is largest in world.
 It has large domestic competition market is governed by the Govt.
where both PSU and Private companies exist.
 Wide geographic dispersion although concentrated towards
northeastern part near the iron ore mines.
 Concentration towards sea coast and river to minimize pollution, ease
for logistic cost and increase efficiency.
 Issues relating to the content of iron in the ore, thus high iron ore
content are being imported.
 Energy cost issue is global issue and will affect all the steel
manufacturers.
 Chinese steel market is the largest and even seems to grow in near
by future.
1 September 201314
Indian and Chinese Steel Industry at a Glance
FIIB

15. 1 September 2013
Indian and Chinese Steel Industry at a Glance
FIIB15
Presented By,
Dasari Pradeep
Harshit Arya
Manish Pawar
Rajesh
For more details; go to:-
https://sites.google.com/site/steellearn
er/