Indian steel industry

1. The Indian Steel Industry
An Analysis
-Ribhu Vashishtha

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6. First integrated iron & steel plant of India
Tata Iron & Steel Co.
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Setup in 1907
Site: Village
Sakchi(renamed
Jamshedpur in 1919)
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7. Top steel manufacturing companies of India
1. Tata Steel - 23.5 mn tonnes(7th
largest steel producer of the world)
2. SAIL -13.5 mn tonnes(18th largest
steel producer of the world)
3. JSW Steel - 10 mn tonnes
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10. Secondary
Producers
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11. Integrated Producers Secondary Producers
Those that convert iron ore
into steel.
There are three major
integrated steel players in
India, namely Steel Authority
of India Limited (SAIL),
TATA Steel and Rashtriya
Ispat Nigam Limited (RINL).
These are the mini steel
plants (MSPs), which make
steel by melting scrap or
sponge iron or a mixture of
the two.
Essar Steel, Ispat Industries
and Lloyds steel are the
largest producers of steel
through the secondary route.
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13. Steel Production Processes
1. Blast furnace/basic oxygen furnace
(BF/BOF)
2. Electric Arc Furnace (EAF)
3.COREX or Cipcor Process
4.Induction Arc Furnace (IAF)
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Steel use by sector
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15. Indian Steel Demand
Indian Steel Consumption has recorded 9.65
CAGR over the past few years.
Per capita steel consumption in India is 55 kg
and the average per capita steel consumption of
the world is 206 kg and 324 kg in the developed
world.
Steel demand to continue at CAGR 10% or
higher, at least for 10 years ahead.
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Steel Demand Driver
 Strong Economic Growth
 Urbanisation
 Massive government efforts to create transport and industrial
infrastructure : the Government is expected to invest $514 billion on
infrastructure by 2012.
 Private Sector Investment is growing at above 15% annually.
 Foreign Investment of nearly 40 billion dollar committed in steel sector.
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19. Steel Consumption Growth Pattern
 Growth story of Indian economy has invariably been shaped by
investment.
 The primary drivers will raise initially ( in the first phase of the growth
cycle) demand for rebars, sections, plates, seamless pipes, galvanised
sheets, pipes and tubes and electrical sheets. Overall, this will hold the
share of long products up.
 The second phase of development, to be led by consumption boom, will
drive up demand for cold rolled sheets, HR sheets, tinplates, stainless
steel, alloy steel, etc.. Slowly leading to a rise in the share of flat
products in the total consumption of finished steel.
 However, in the next 15 years, investment will remain the driving force
for growth in the economy providing in the process a strong and stable
market for long products ( plus the other flat products mentioned )
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Some facts..
 Domestic steel demand is the main driver of capacity growth.
 Per capita steel consumption forecast to double within 5 –7 years.
 Production and capacity must increase synchronously to meet domestic
demand.
 Most of the demand likely from infrastructure, housing, automobile, gas
and oil pipelines, capital goods (machinery) and consumer goods.
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Greenfield Projects
 10-15 million tonnes of capacity are at various stages, of implementation
where land has been acquired.
 10-15 million tonnes, at preliminary stages (such as land acquisition,
statutory clearances, etc.)
 Post September 2008 global economic meltdown has caused deferment
of some of the greenfield projects.
 Land acquisition has become a critical factor for few projects.
 Steel capacity by 2012 is expected at 110 –124 million tonnes.
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22. Formulated in 2005
Central Goal: The creation of an industry with 110 million
tonnes of capacity and 100 million tonnes of production by
2019-20 — implying an average growth in production of
nearly 7 per cent a year.
The national policy seeks to facilitate the creation of
additional capacity, removal of procedural and policy
bottlenecks that affect the availability of production inputs,
increased investment in research and development, and
the creation of road, railway, and port infrastructure.
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23. •Tata Steel has been given the green signal by the South African
government to start construction on its US$ 103 million
ferrochrome steel plant at Richards Bay in the country's KwaZulu-
Natal region.
•After acquiring Singapore's NatSteel, Tata Steel bought Thailand's
Millennium Steel PLC for US$ 400 million as part of its US$ 23
billion expansion programme over the next 12 to 15 years.
•The acquisition of the Anglo-Dutch steelmaker Corus adds 19 MT
of steel-making capacity for TATA Steel.
•JSW is close to picking up a stake in Thailand's largest stainless
steel producer.
•The UK-based speciality steel and engineering group, Caparo's
new facilities are coming up in Chennai, Pitampur, Bawal, Noida
and Gurgaon.
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24. •Significant availability of high quality iron ore.
•Availability of highly skilled technical manpower at low cost.
•A history and experience to carry in steel making.
•Strong entrepreneurship, especially in the private sector.
•Strong domestic market growth potential reduces the risk in
higher exposure to the global market.
•Overall, steelmaking in India is highly cost efficient and
needs no protection from ‘fairly traded’ imports.
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