Impact of GST on Indian Steel Industry

WEAKNESS
IS A SIGN
OF THOSE
WHO REFUSE
TO BEND.

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Product
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Back Inside
Cover Inside
07
02
ADVERTISEMENT INDEX
12
14
50
22
Anti-dumping; a stable
environment for Indian
Steel industry
08
Metal Recycling Policy20
States grapple demand
-supply deficit of sand
06
Constructive Thinking on
the Ship Recycling Sector
in Bangladesh
18
New Stressed Assets
Ordinance - RBI Conferred
with Sweeping Powers
52
Intervista
Pakistan Steel Industry Set
for Seismic Transformation
54
Japan's Steel Industry
out of Hibernation
28
“Excessive protectionism is
not good for Steel Industry”
– SUFI, President
16
STEEL
INNOVATION
New Series
Maximizing high
alumina iron ore
fines consumption
in sinter plant
Itmk 3 Process of
making Iron Nuggets
24
42
COAL
IRON ORE
STEEL
10 Slide in Coking Coal Prices
Calms Indian Steel Makers
India's Top 5 Iron Ore
Producers in FY17
Will Iron ore prices fall
below USD 50/t in 2018?
Odisha's iron ore prices
to stay subdued on glut,
weak oﬀers
Light steel redeﬁning
auto engineering
SET TO DISRUPT
WORLD SCRAP TRADE
DYNAMICS
CHINA
COVER
STORY
Pg 30 Pg 38
CONTENTS

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Vol V Issue 12 June 2017 RNI:CHHBIL/2013/53990
PostalRegnNoCG/RYPDN/87/2015-17
www.steel-360.com
EDITOR’S LETTER
@
@360steel Steel 360
GST is out of the cocoon; a major
opportunity for Steel Industry
A transformation time for Indian tax system GST which was born out of
patience & struggle; the uniformed tax system which is expected to roll out on
1st of July is a turning point in the Indian tax regime. The implementation of
GST will bring lot more benefits at the consumer end. The main objective of
GST is to eliminate excessive taxation. In the run-up to one of the biggest tax
reforms in the country, the market is abuzz with new rules and guidelines
about the Goods and Services Tax (GST).
Steel industry is likely to benefit from the new GST rate for steel which is at
18%, with key inputs like coal, iron ore marked at 5%, which is the lowest slab
under GST, could help to lower input costs. Together, with a substantial slash
in transport costs due to unified and standard tax rate under GST, this is likely
to help steel companies reeling under large debt and also keep steel prices
stable. The layers of GST is simplified in an in- depth cover story for our
readers on page-30.
The dragon is on move, China being the number one in iron ore import; is
making a significant shift in to scrap export and the presence is felt in the
industry. What will be the outcome? Who will be engulfed by the move of
China? A detailed analysis on page-38.
The Steel Users Federation of India (SUFI) contribution to steel industry is
unparalleled, addressing critical issues relating to steel users and work as a
catalyst for making policy frameworks there by contributing to the growth of
the nation; Mr. Nikunj Turakhia, President, SUFI in an exclusive interview
speaks on the dynamics of steel industry and on overtly protectionism by the
government, its outcome on page–16.
A new series on Steel innovation from this issue has began, especially
technology used in the industry for making iron nuggets and detailed
information on the maximizing high alumina iron ore fines in sintering by our
columnist on page-24, 42.
Dr Sheena Abraham
info@steel-360.com
Sr. Associate Editor
Dr Sheena Abraham
Assistant Editor
Ramon Burns
Columnist
Christine Mavromichalis,
Satyendra Kumar Sarna
Kartick Maheshwari
Nitesh Kumar Nirala
& Sanjeev Tiwari
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06 STEEL360INDIAJUNE 2017
States grapple demand-supply
deﬁcit of sand
W
ith India's
unprecedented
construction
boom, the
demand for sand has become a
multibillion dollar market and is
poised to scale further at an
expeditious rate here forth with
the Centre allocating INR 3.9
lakh crore towards infrastructural
development in the present fiscal
alone. Such is the demand for
precious sand that it has created
a massive mining industry
stretching from Rajasthan and
Uttar Pradesh in the North to
entire southern India. The sheer
size of sand mining operations is
believed to be greater than many
established industries in India.
However despite the magnitude
of the demand, supply of the
vital raw material has been
dwindling continuously over the
past few years owing to
environmental restrictions
imposed by the Centre, hoarding
and unregulated mining. The
demand – supply deficit has
affected construction projects
across the country thus forcing
State governments to strengthen
monitoring and devise plans to
regulate supply.
The Union Govt has also
intervened in the issue as several
projects under the Ministry of
Transport as well as Urban
Development could be affected.
However, according to experts
there is little that the Centre can
do as Mines and Minerals
BY STEEL360 BUREAUINDUSTRY
(Development and Regulation) act
1957 has categorised sand as a
minor mineral thus giving the
authority to regulate and monitor
excavation and supply of sand to
the State governments.
The Centre in a recent meeting
with State government has come up
with a multi pronged approach to
tackle the problem of supply deficit
and illegal mining.
The Union Government has made
it mandatory for states to hold
auction for sand mines to increase
transparency and remove
discretionary powers in mine
allotments. Following the
directives, many states including
Punjab, Rajasthan, Madhya Pradesh
etc have already commenced online
auction of minor mineral mines
including sand but with mixed
results. Madhya Pradesh for
instance which was the first state to
go the e-auction route for sand
failed to get bidders due to high
fees and increasing operation cost.
On the other hand, Andhra Pradesh
which has been in the eye of the
storm for failing to curb illegal
mining decided to adopt a policy of
allowing free sand excavation for
anyone who needs it. But even the
success of this plan was limited as
the Andhra Pradesh government
was slapped with a notice from
the National Green Tribunal over
mechanized excavation and use of
suction pumps by private entities.
The AP government is now
contemplating on ways to improve
its present mining policy. In the
mean time state of Telangana has
come up with a novel process of
procuring and selling sand online
through its Sand Sale Management
and Monitoring System. The
excavation is also undertaken though
its own PSU, the Telangana State
Mineral Development Corporation.
States, with limited resources, have
also been encouraged to examine the
creation of substitute for sand like
crushing of boulders or creation of
artificial sand.
Inter-state movement of such basic
commodity should be permitted so
that the requirement of states with
limited resources is met by the
neighboring states . Lastly, it has
asked states which have recently
started the e-auctioning of mines to
take assistance from MSTC
Limited , which is willing to
provide their services for auction
of minor minerals.
An eye in the sky
The ministry of Environment has
planned to collaborate with Indian
Space Research Organization and
use satellite imaging to check sand
mining. The states have been asked
to prepare maps of sand mines
which could then be tracked to
monitor over excavation. In a novel
initiative the ministry has also
deployed drones for the same
purpose. The use of Unmanned
Aerial Vehicles (UAV) has been
quite successful in states like
Maharashtra and Madhya Pradesh.

Anti-dumping; a stable
environment for Indian
Steel industry
A
imed at protecting the
Indian domestic steel
firms, the definitive
anti-dumping duty
imposed on imports of a clutch of
hot-rolled and cold-rolled flat
products of steel is likely to
benefit domestic firms in more
ways than one. While rating
agency Fitch said that it will lower
their profitability risks, the Indian
credit rating agency (ICRA) is of
the view that the anti-dumping
regime is likely to create a more
stable operating environment for
the domestic flat steel players and
protect them from the volatility in
the international prices.
Following petitions filed by
domestic steel majors, the
directorate general of anti-dumping
(DGAD) found that predatory
imports were indeed causing
material injury to steel majors such
as Tata Steel and JSW Steel.
Accordingly, the finance ministry
imposed definitive anti-dumping
duty from several countries
including China, Japan and South
Korea, through its orders dated 11
and 12 May 2017.
The duty has been fixed at a level
which is the difference between the
product's landed value and the
threshold of USD 478 - 489/mt for
HR coils, USD 561/mt for HR
plates/sheets, and USD576/mt for
CR coils. Anti-dumping duties will
not be imposed if the landed value
of imported products is higher. The
duties are in place until August 2021.
This is expected to prevent the landed
cost of imported flat steel from falling
below this threshold, thereby protecting
domestic players from the volatility in
international steel prices to an extent.
There is no doubt that the domestic
firms were under severe stress due to
cheaper imports of steel from these
countries for more than two years now
so much so that the sector's debt-
servicing ability went for a toss and it
started resorting to retrenchment. The
sector was already one of the largest
contributors to the bad loans of the
banking sector.
The government, however, has taken a
series of measures, both tariff and non-
tariff, in the past to rein in the rising
imports. It had in February 2016,
imposed minimum import price on 173
products in the range of USD341-752
per tonne. After pruning the MIP list in
the interim, in February, 2017, these
barriers to imports have been removed
and replaced with provisional anti-
dumping duty. All these measures
helped the industry a lot. As a result,
India turned into a net exporter of steel
in the last fiscal after a gap of three
years. In 2016-17, India's steel imports
fell by an annual 37% to 7.4mnt; while
exports increased by 102% to 8.2 mnt.
According to ICRA, since flat steel
products covered under the anti-
dumping duty contributed around 60%
to India's cumulative steel imports
between FY'2015 and FY'2017, the
current measure is expected to keep
India's steel imports under check in
coming years.
“There is significant overcapacity in
the global steel industry, and any
softening of international prices like in
the recent past may affect domestic
prices too, if exports are non-
remunerative, leading to price-based
competition in India, especially given
the slackness in domestic demand,”
ICRA said.
Fitch said, “We think the anti-dumping
duties reduce the risks to selling prices
and brighten the outlook for
profitability, amid prevailing global
overcapacity. International steel prices
have been volatile recently, with China
domestic spot HRC prices rising to
around USD 550/tonne in early 2017
from around USD 420/tonne in
September 2016, as the input cost of
coking coal jumped. Steel prices in
China have declined to below USD
450/tonne in May 2017 with the
moderation in coking coal prices.
However, a rise in prices to above the
level specified by the anti-dumping
duties in response to a rebound in
input costs, would expose Indian
steelmakers to margin pressure from
imports.”
Apart from anti-dumping duty, the
government, has cleared a policy that
aims at providing preference to
domestically manufactured steel
products on government procurement,
which will virtually stop imports by
foreign companies which do not have
any processing base in India. This will
also provide a huge relief for the
domestic firms.

Slide in Coking Coal
Prices Calms
Indian Steel Makers
BY STEEL360 BUREAUCOAL
T
he impact of the Debbie
cyclonic storm in
Australia has subsided.
The cyclone ripping into
the coal territory of the largest
producer had spawned concerns
over supplies. The tropical storm
hit the key coal lines cutting off
supplies to other countries.
Interruption in coal supplies
escalated spot prices of premium
hard coking coal to a record high
of USD314 a tonne, the highest
since the second quarter of 2011.
What's more, the contracted prices
also shot up to USD330 per tonne
as steel makers were forced to seek
coal shipments from faraway
nations like Canada when their
stockpiles reached perilously low
levels. Price spike was also the fall
out of flooding in Queensland.
Steel companies from Japan, China
and India took to buying the key
ingredient from spot markets.
But, the worries on coal despatches
by Australia are petering out.
Negotiations to set quarterly coking
coal prices that Japan's steel
companies will pay to the
Australian miners have resumed.
The talks would fix the benchmark
prices of coking coal to be paid to
miners in Australia, the largest
exporter.
On hindsight, it can be said the
impact of Australia's tropical storm
was overplayed. Coking coal trade
has entered the bear territory with
prices softening to USD170 a tonne.
The global market is now awash with
supplies as end users have taken to
the first wave of restocking in April
2017. Buyers are not hoping to
liquidate their coking coal stock
unless the price settles at pre-Debbie
level. Anticipating that the impact of
the cyclone would last longer than
what it turned out to be, some end
users bought too much of the steel
making material. That in itself has
left ample room for a further
correction in coking coal prices. In
fact, before the supply disruption in
Australia, Japan's steel mills were
looking to clinch a quarterly price of
USD150 per tonne. A forecast by
Wood Mackenzie corroborates this,
saying the coking coal price could
tumble to the production break even
of USD150 per tonne.
The descending coking coal prices
are a pointer to flagging demand in
China, the largest consumer. As the
Chinese stimulus fades, new car sales
are receding- its real estate industry
is also losing steam. A combination
of the two factors is contributing to
the downturn in demand and
exerting downward pressure on
coking coal prices.
Coking coal price fall together with
weakening iron ore prices are a
double whammy for the Indian steel
companies. The time is opportune to
go for quarterly and long-term
coking coal sourcing arrangements
though market volatility has to be
priced in. India's steel makers are
heavily into coking coal imports.
Pricier coking coal has hurt their
margins for most part of FY17.
Higher coking coal and iron ore
prices were set to take the sheen off
the Q4 earnings for all the leading
steel companies. Despite a sequential
improvement in realization of USD
23 – USD31 /tonne, Elara Capital
expects operating income of steel
manufacturers to be hit on the back
of higher coal costs. Over the last
The descending
coking coal prices are
a pointer to ﬂagging
demand in China, the
largest consumer.
The Indian government
has drafted a new steel
policy to raise the
country's steel
production capacity to
300 million tonne by
2030-2032.

A number of private and
state-owned mills have
almost doubled their
steelmaking capacities
over the past five years
few years, steel-makers have been
sourcing raw materials based on
index prices. The long-term
contracts have been replaced with
index-based prices, which are often
impacted by speculation and events
like cyclones.
But, the recent slump in prices is
an opportunity for the steel firms
to shore up margins and
consolidate their expansion goals.
A report by S&P Global Platts says
India is poised to become the
second biggest steel producing
country in the world after China
over the next 12-18 months, as
steelmakers continue adding
capacities in anticipation of
upcoming demand.
This production increase is despite
the slow pace of current steel
consumption in the country, it said.
India's overall finished steel output
over April-January in FY17 was
only 82.87 million tonne, about 68
per cent of installed steel capacity
of 122 million tonne per annum.
The Indian government has drafted
a new steel policy to raise the
country's steel production capacity
to 300 million tonne by 2030-2032.
Previously, this target was set for a
time period of 2025. A number of
private and state-owned mills have
almost doubled their steelmaking
capacities over the past five years,
informed the report. The front
runner was India's largest
steelmaker, state-owned Steel
Authority of India (SAIL), which
increased crude steel production
capacity to 20 million tonne per
year from the previous 13 million.
The National Steel Policy aims at
creating self sufficiency in steel
production, encouraging adequate
capacity additions, developing
globally competitive steel
manufacturing capabilities,
enhancing domestic steel demand,
facilitating foreign investment and
asset acquisition of raw materials.
Signs of the domestic steel industry
gaining competitive edge in exports
are palpable. India's steel exports
rose 78 per cent to 6.6 million
tonnes, while imports fell by 39 per
cent between April 2016 and
February 2017, making India a net
exporter of steel for the first time in
four years, according to the Indian
Steel Association. The domestic
steel output grew 11 per cent to 92
million tonnes and consumption
grew 3.4 per cent to 76.2 million
tonnes during the same period.
During 2015-16, India imported
11.7 million tonnes as it was
flooded with cheap supplies from
China, the biggest steel producer
and exporter. The World Steel
Association has projected India's
steel demand to grow by 5.7 per
cent in 2017 against the flat global
rate of 0.5 per cent and a
deceleration by 2 percent in China.
STEEL360INDIA JUNE 2017 11
0
50
100
150
200
250
300
350
2013 2014 2015 2016 2017
SpotPrices(USD/MTFoBAustralia
Coking Coal Premium HCC Prices Trend
Source: CoalMint

India's Top 5 Iron Ore
Producers in FY17
BY NISHTHA MUKERJEEIRON ORE
23.4
26.57
19
34.03
10.89
Significant improvement in iron ore production from states of Odisha, Chhattisgarh and Goa resulted in sharp increase in
India's iron ore production in FY17. Country's iron ore production is anticipated to have touched 190 mnt in FY17
against 155.9 mnt in FY16. Thus last fiscal witnessed a growth of 22% Y-o-Y in nations' iron ore output.
Iron ore production by India's single largest iron ore
producer-National Mineral Development Corporation
(NMDC) was recorded at 34.03 mnt in FY17 against
28.58 mnt in FY16. On yearly premises, production
figure has moved up by 19%. Output from its
Chhattisgarh mines increased considerably from 16.6
mnt in FY16 to 22.03 mnt in FY17. Iron ore
production from Karnataka mines remained mostly
stable on yearly premises and stood at 12 mnt in
FY17.
Tata Steel produced 16.43 mnt iron ore from its
captive mines located in Jharkhand and Odisha in
FY16. Steel maker's iron ore output increased from
its Odisha mines in FY17. Its' production from Odisha
mines increased by 28% Y-o-Y from 9.29 mnt in FY16
to 11.85 mnt in FY17. Thus as per Steel 360 analysis,
the steel maker must have witnessed growth of 16%
Y-o-Y in its iron ore output in FY17.
Aiming at security of raw material supplies from captive
mines, SAIL targeted highest ever iron ore output last
fiscal. SAIL has its captive mines in Odisha, Jharkhand
and Chhattisgarh. The capacity of existing mines at
Barsuan, Kalta, Kiriburu, Meghahatuburu, Bolani & Gua
are being ramped up to meet the requirement of iron
ore for post ongoing phase of expansion. Captive iron
ore production from SAIL's Odisha mines increased
marginally from 6.45 mnt in FY16 to 6.96 mnt in FY17.
Odisha's largest merchant iron ore producer - Rungta
Mines recorded an increase of 30% Y-o-Y in its yearly
iron ore production from Odisha. It produced 22.8 mnt
iron ore from its Odisha mines in FY17 compared to
17.58 mnt in FY16. State govt's push to raise production
to match up with the laid limits resulted in increased
outputs. Also sharp hike in exports boosted miner's
output in last fiscal. Miner's exports moved up from nil in
FY16 to 2.51 mnt in FY17.
nd
Serajuddin and Co.- Odisha's 2 largest merchant iron ore miner produced 10.89 mnt
iron ore from its Balda block iron ore mines in FY17 compared to 10.15 mnt in FY16.
RUNGTA
SAIL
TATA STEEL
NMDC
Serajuddin & Co.
FY17
FY17
FY17
FY17
FY17
FY16
FY16
FY16
FY16
FY16
18.1
24.83
16.43
28.58
10.15
Y-o-Y
Y-o-Y
Y-o-Y
Y-o-Y
Y-o-Y
30%
7%
16%
19%
7%
mnt*
mnt*
mnt*
mnt*
mnt
mnt
mnt
mnt
mnt
mnt
*Provisional. Odisha iron ore production indicated includes iron ore lump, ﬁnes & concentrate
1
3
2
4
5

Will Iron ore prices fall
below USD 50/t in 2018?
BY SUNIL PARKHEIRON ORE
T
he steel industry looks
up to China for the
forecast and plans its
successive move to
make the most of the opportunities
available in the market. The current
trends in Chinese market speak
volumes to predict what the future
holds for the steelmakers all over
the world. Below are some of the
indicators everyone that is related
to the industry should watch for in
coming days.
Rise in iron ore inventory
at Chinese major ports
Iron ore stock at Chinese major
ports have increased from 131 mnt
as on 7th Apr'17 to 136mnt on 19th
May'17. The abundant supply of
parked iron ore on Chinese ports
has been having its unfavorable
effect on global iron ore prices. The
prices fell consistently for more
than a few weeks now. Thirteen
years' high inventories at Chinese
major ports are being looked at as a
catalyst along with few other
factors that will change the course
for the rest of 2017 and the year
next for iron ore prices.
Increasing iron ore
supplies from Australia,
Brazil & India
The other detriment is off-course
the production itself that has steadily
been growing for some time in major
iron ore producing countries.
BRAZIL
The numbers for the quarter ended in
Mar'17 suggest that Vale's production
grew by 11% Y-o-Y to 86.20mnt over
77.54mnt for corresponding period last
year due to ramp-up of the S11D and
Itabiritos projects in the Southeastern
System. It is estimated to produce 360-
380mnt iron ore by the end of 2017
which would mean a minimum of 3 %
increase against 348.8mnt production
in 2016.
AUSTRALIA
Australian BHP Billiton the third
largest iron ore producer's output grew
by 3.4% for Q2 at 60mnt over 58mnt
in Q1 FY17. According to the report,
the miner produced 118mnt iron ore
during first half of FY17. For
Australian FY17, the miner maintains
its production guidance between 228
and 237mnt iron ore excluding
production at Samarco. The miner
produced 227mnt iron ore during
Australian FY16.
Moreover, the Western Australian Iron
Ore (WAIO) output is recorded at
136mnt in first half of FY17. The
output increased by 4% Y-o-Y as it
was 131mnt during same time period a
year earlier. In Q2 FY17, production
from WAIO remained at 70mnt.
WAIO's output is recorded at 257mnt
in FY16. The output rose by 2% Y-o-
Y as its Jimblebar mining hub
operated at full capacity. The miner
increased its forecast between 265 and
275mnt for FY17. Along with a focus
on productivity and the ramp-up of
additional capacity at the Jimblebar
mining hub, the company aims to
increase its system capacity to 290mnt
pa in the FY19.
INDIA
Indian iron ore output for Jan-Mar
quarter is assessed by SteelMint at
56mnt and is expected to reach
between 210-220mnt by the end of
CY17. India produced 182mnt iron ore
in CY16 an increase of 30% Y-o-Y
compared to 140.5mnt in CY15.
A realistic view of supply over
demand, project prices coming down
to the same by the end of May'16 at
USD 50/mnt contrary to the
anticipated increase in Chinese steel
consumption, the buying is slowed
down by the manufactures some mill
owner are preferring the local lower
grade material in China over the
higher grade foreign imported
concentrate. In previous few weeks
even after compromising prices the
suppliers could not strike any large
deals under tremendous pressure as
buyers waited for further price fall to
replenish their stocks.
The expert predictions of high prices
Iron ore prices swirled down and hit almost a six-month low on Apr, 18th 2017 at USD 62/mnt as
speculators evaluated the signs in the market from China, the largest consumer of iron ore.

was 259.2mnt in the same period last
year.
Declining Chinese steel
prices
Amid weakening steel futures,
Chinese domestic, as well as export
steel prices, witnessed sharp plunge
since beginning of Mar'17. For
instance, Chinese HRC export offers
have come down from USD
510/mnt, FoB China in beginning of
Mar'17 to currently prices of USD
420-425/mnt, FoB China. On similar
lines, Chinese rebar export
offers have come down from
USD 475/mnt, FoB China in
beginning of Mar'17 to current
assessment of USD 410/mnt,
FoB China.
It seems the price decline spree
is not coming to an end
anytime soon. Unless some
drastic measures are taken by
the largest consumer of iron
ore, the graph is clearly
southward bound, to slow
down the already staggered
market.
to be afloat began
to erode from the
end of Mar'17 as
soon as speculators'
lack of interest
brought the prices
for the steel-
making material
down below USD
80/mnt after the
futures were
abandoned all of a
sudden.
Intermittent rise
with penny ante
increase could not
sustain the splendor
for the material that attained the 30
months highest price on Feb, 21st
2017 at USD 95/mnt.
Iron ore prices swirled down and hit
almost a six-month low on Apr, 18th
2017 at USD 62/mnt as speculators
evaluated the signs in the market
from China, the largest consumer of
iron ore, there was also a record
steel output in the month of March
along with obvious increase in
supply. Vale, one of the largest
producers of iron ore from Brazil is
setting up a new facility, to boost up
seaborne sales. Also the miners in
China have increased the production
levels.
China's increased iron ore
imports & rising domestic
iron ore output
China's appetite for iron ore seems
unending. China imported 271mnt
iron ore in Q1 CY17 against
241mnt, thus up by 12% Y-o-Y. On
the other hand, China's crude iron
ore production in the first quarter of
2017 was registered at 297.8mnt,
significantly up by 15% Y-o-Y as it
Estimated Production by three Major Iron Ore
Producing Countries for CY17
Producer
2016 % Change
Min
% Change
MaxProduction Min Max
Vale 340 360 380 6% 12%
BHP Billiton 227 228 237 0% 4%
Western Australian
Iron Ore (WAIO)
257 265 275 3% 7%
India 182 210* 220* 15% 21%
Total
Figures in million tonne
*Expected
1006 1063 1112 6% 11%
2017 Guidance
Source: Company Reports, SteelMint
0
50
100
150
200
250
PricesinUSD/MT,CFRChina
Chinese Spot Iron Ore Fines (Fe 62%) Price Trend
Source: SteelMint

“Excessive protectionism is
not good for Steel Industry”
– SUFI, President
NIKUNJ TURAKHIA, President, SUFI
INTERVISTA
Q. What is your opinion on
the present global price
scenario, as current levels
of Anti Dumping Duty on
HRC, CRC & Plates turned
redundant? & How good is
protectionism for the
industry?
A. Global prices are outcome
of mainly two factors - first is
price of raw material such as
iron ore and coking coke and
secondly demand and supply
situation. Steel is in excess
capacity is a well-established
fact and demand is slow
worldwide. As per WSA
global demand for steel is
expected to grow at a slower
rate next year. China accounts
for 45% of global
consumption and demand in China
is expected to fall by 2% in 2018
as per WSA. For last one year or
so Indian market has been by and
BY STEEL360 BUREAU
The dynamics of global steel trade is affected by Anti dumping duties implemented by different nations and
the recent anti dumping duty by India has left the domestic players in state of thought – processing, as the
long term benefits is worth the wait , but for the short term the benefits are limited. These protectionism
act does it create a whirlwind or open up a bag of opportunity? Mr. Nikunj Turakhia, SUFI's President in an
exclusive interview with Steel360 answers the above question and talks about the role of Steel Users
Federation of India (SUFI), flat steel exports, demand of color coated steel, he also talks about the ever
growing Indian steel industry. Excerpts of the interview follow.
large insulated from fluctuations in
international steel markets. This is
because of a host of protection
measures like - Steel quality control
order which is a non-tariff barrier
followed by tariff barriers such as
increase in basic customs duties
from 7.5% to 10% to 12.5%
presently, safeguard duties,
minimum import price and finally
anti-dumping duties. After MIP
was imposed last year on 5th of
Feb 2016, the world prices have
moved up considerably. The AD
duties were levied based on earlier
data and yes in some cases it has
become redundant. The pertinent
point is how much protectionism
is good and is it healthy for the
user industry and does it not affect
the consumption cycle …?? In my
opinion excessive protectionism is
not good and efforts should be to
make Indian steel mills more
efficient, more globally
competitive.
Q. Indian Flat Steel Exports
increased sharply in FY17. How do
you project flat steel exports &
imports to be in FY18?

A. It will take a while for Indian steel
demand to kick start. Till then there
is no other option but to export for
Indian steel mills. In FY17 exports
jumped almost 102% while imports
were down to 37%. Exports from
India has risen because of two factors
- firstly many countries have put
Anti-Dumping duties on China and
hence they are looking at India for
supply and secondly Indian demand
has still not picked up the way it was
expected to pick up. In FY18 same
trend is likely to continue; the
imports will happen selectively but
may not grow substantially while
exports may be higher. India will
remain net exporter in FY18.
Q. From which sector the demand
of Galvanized Plain coil & Color
coated goods industry is coming
from?
A. The major demand for galvanized
plain coils comes from white goods
industry, auto industry and roofing
segment. While the demand is more
or less stagnant it is seen that more
color coating capacities are coming in
due to demand surge in color roofing
profiles in industrial applications and
infrastructure projects. Hence it is
expected that there will be shortage
of gal coils as a lot more will go into
captive consumption for production of
color coated sheets. Color coated
segment is expected to register robust
growth in demand.
Q. Where do you see the steel
price in near future? Do you think
steel prices will remain under
pressure for some more time as
production continues to remain
higher than consumption?
A. Steel prices will remain under
pressure as supply out strips demand.
It is yet to be seen how much
capacity reduction happens in China.
If capacity reduction happens by 100
to 150 million tons then prices should
remain stable more or less. Of course
speculation in raw material or any
natural calamity needs to be factored
in.
Q. What is impact of
demonetization on flat steel
consumption?
A. Demonetization has had a
temporary effect on demand for
coated products –galvanized and
color coated steel. The roofing
segment has considerable share of
dealings in cash mainly when sold to
farmers. The industrial raw material
such as hot rolled, cold rolled had
very limited impact of
demonetization. However from March
onwards it is business as usual and in
fact there is tremendous spurt in
demand mainly for coated products.
Q. Can you highlight on the role
of SUFI in safe guarding the steel
fraternity?
The steel fraternity consisting of steel
mills/manufacturers, steel users and
steel traders/distributors do not have a
common platform in order to address
their internal issues and policy issues
with the government. It is a
fragmented lot with
representations/associations either
based on location or product. It is
also a reality that each of these stake
holders cannot exist in isolation and
are interdependent. Therefore it is
about time that they understand
importance of each other and co-exist
in a way that it is win-win for all.
SUFI plays precisely this role of
bringing all steel stake holders on to
a common platform for the benefit of
all, for achieving the objective of 300
million tons by 2030, increasing per
capita consumption to 160kg per
head. This is only possible with
continuous dialogue amongst stake
holders and with the policy makers.
Victor Hugo once said and I quote
“Nothing is more powerful than an
idea whose time has come”. SUFI is
an idea whose time has come.
Q. As President of SUFI what are
challenges faced by Steel industry
and how far government National
Steel Policy will give impetus to
the growth of steel industry?
A. Each of the stake holders in steel
has different challenges/issues. The
steel mills are grappling with issues
such as high debts, inconsistent raw
material supplies, higher interest rates,
inefficient surface transport. These
issues are being dealt with by the
government but they are of complex
nature. The steel users on other hand
have challenges such as not getting
raw material at the right price, skewed
duty structure allowing import of
finished goods and unstable market
demand. Steel trade has issues such as
high bad debts and no proper
mechanism to address this issue,
inconsistent supply, too much
fluctuation in prices.
These challenges are for real and need
to be addressed asap. The national
steel policy lays down the road map
to increase the steelmaking capacity
and consumption. Unfortunately
certain issues listed above do not
come under the purview of steel
ministry and hence it is silent on the
same. Nonetheless it is a proactive
step.
Q. Will government scheme of
using locally manufactured steel
benefit local steel industry?
A. The local steel mills will benefit
immensely if this scheme is
implemented properly. It is yet to be
seen how checks will be kept on
implementation.

BY CHRISTINE MAVROMICHALIS, LL.M. BUSINESS DEVELOPMENT & MARKETING OFFICER, GMS (DUBAI)COLUMN
T
here is no doubt that
Bangladesh is one of
the emerging countries
of Asia. The latest data
figures prove that there is an
increasing growth trend in various
sectors boosting the local economy
and raising living standards.
However, poor living conditions,
high illiteracy and wages below
average still dominate most regions
of Bangladesh.
The ship recycling sector is a key
business in Bangladesh: most
recent data released by IHS for
2016 (World Casualty Statistics
2016) and other research
companies, show that the coastline
area outside Chittagong where the
ship recycling activity is taking
place, has lead the game in 2016
by taking the 1st place with
9,888,137Gross Tons (GT), with
India in the 2nd place with
8,474,617 GT, Pakistan, in 3rd
place with 5,703,133GT, China in
the 4th place with 3,464,380 GT,
and Turkey in the fifth place with
721,083 GT.
Noteworthy is the fact that the rest
of the world put together in 2016
recycled just 348,750 GT, or 1.2%
of the tonnage recycled in the year.
According to a recent study,
Chittagong currently hosts 148
Constructive Thinking on the
Ship Recycling Sector
in Bangladesh
registered ship recycling yards, that
extend along 18km. of coastal land
and provides work toapprox. 25,000 –
40,000 thousand workers from
Bangladesh. At the time of the study,
approximately 68 yards were active,
although this figure varies dependent
on seasonal market conditions.
As per the SENSREC economic study,
Bangladesh is one of the leading ship
recycling countries in the world.
According to the report that was
released earlier this year: “On average,
the industry recycled over 175 ships
totalling about 1.8 million light
displacement tonnes (LDTs; the most
relevant measurement unit in ship
recycling) a year over the past decade
to 2015. Over this period, the
Bangladesh ship recycling industry has
accounted for over 25 percent of the
total ships scrapped (in LDTs) by the
five leading ship breaking nations; the
other four being India, China, Pakistan
and Turkey.
In 2015, Bangladesh became the top
ship recycling country in the world,
surpassing India once again since
2008. Despite the structural and
cyclical ups and downs in the global
shipping and ship recycling markets,
the ship recycling industry in
Bangladesh has managed a respectable
growth, estimated at about 14 percent
a year on average since 1980.”
'Safe and Environmentally Sound Ship Recycling in Bangladesh' (SENSREC – Phase I) Economic study report that conducted by IMO and the Government of the People's Republic
of Bangladesh,http://www.imo.org/en/OurWork/Environment/SupportToMemberStates/MajorProjects/Pages/Ship-recycling.aspx
The study report goes on to explain
how the ship recycling industry
contributes directly and indirectly to
the national and local economy
through the feeding of the domestic
steel manufacturing market:
“…Between 80 and 90 percent of all
materials recovered from dismantled
ships (measured in Metric tonnes)
constituted various forms of steel
scraps. Typically, between 50 and 60
percent of these recovered steel
scraps are used in re-rolling mills in
Bangladesh. As such, steel scraps
recovered from ship breaking account
for over half of the domestically
sourced feedstock into total steel
manufacturing in Bangladesh…
Recycled ships are effectively
imported feedstock for domestic steel
manufacturing.
In addition to steel scraps, ship
breaking yards recover substantial
amount of non-ferrous metals (in the
form of scraps, sheets, nets and bar
materials), estimated at 7,500 metric
tonnes in 2015 worth about Taka 1.2
billion (or about USD17million) at
the ‘yard gate’ in 2009-10 constant
prices. Ship recycling also recovers
numerous machines, components and
hardware such as pipes, chains, boats,
anchors and propellers, the value of
which was estimated at Taka 7.6
billion (about USD111 million) at the
‘yard gate’ for the year 2015.”
The stepping stone for the evolution
of any industry, one could say is the
foundation of necessary infrastructure.
The ship recycling sector in

Bangladesh lacks exactly
that: proper infrastructure
for the treatment and
disposal of hazardous
wastes and a regulated
worker training
programme to protect the
labour force and the
environment during the
ship recycling process.
The Government of
Bangladesh, together with
specialized agencies of
the United Nations (IMO,
UNIDO, UNEP) are
discussing and planning
Phase II of the SENSREC
project, which would
focus on Capacity
Building for the
implementation of
training across the ship
recycling work force in
order to limit the accident rate in
the ship recycling yards of
Chittagong.
Also, under Phase II of the project,
plans are made for building
infrastructure for the
environmentally sound management
of hazardous materials, the so-called
‘Treatment, Storage and Disposal
Facility’ (TSDF).
These two necessary developments
would lead the way to sustainable
ship recycling practices, one step
closer to the guidelines set by the
Hong Kong Convention for the Safe
and Environmentally Sound
Recycling of Ships (HKC).
Notably, some significant efforts are
being made by a small number of
local yard owners –with the best
example being the impressive
investment made by PHP Ship
Breaking and Recycling Industries
Ltd, exceeding USD 3million.
Nevertheless, there is still long way
to go before the two major issues of
ship recycling in Bangladesh are
addressed, namely is the lack of
waste management facilities, and the
implementation of regulated training
for the entire workforce. In order to
build these necessary facilities,
significant funds need to be
allocated and the whole project to be
designed and monitored by an expert
body formed by specialists.
According to Dr. Nikos Mikelis,
Non-Executive Director of GMS and
former senior member of the IMO:
“…It is of imperative importance for
all the stakeholders involved in the
ship recycling industry in
Bangladesh to understand that an
important investment is required for
the construction of a TSDF to
enable yard owners to dispose
hazardous materials safely and for the
implementation of training and
certification for the workforce. This is
the time for the ship recycling
industry of Bangladesh, for the global
community, for individual shipowners,
cash buyers and for the Government
of Bangladesh to step in and take the
necessary action for the successful
realization of the next phase of this
project…”.
The situation will dramatically
improve once the construction of
TSDFs begin; the process of building
the carefully designed Treatment,
Storage and Disposal facilities will
signal the change of an era for
Bangladesh. Who can assist? The
shipowners? The Government of
Bangladesh? The Bangladesh
Shipbreakers Association? The NGOs?
There is probably only one answer:
All of us together.

Metal Recycling Policy
A
demand and an idea
that elevated more than
a year back in Jan’2016
with an apex trade
body MRAI (Metal Recycling
Association of India) requesting the
then union steel secretary Aruna
Sundararajan and Balvinder Kumar,
Union Mines Secretary to resolve
the industry concern is about to see
the day’s light in the coming
months.
The announcement of forming ‘A
Metal Recycling Policy’ comes at
such a time when the National
Green Tribunal’s (NGT) sudden
strong presence is felt and there are
more than few number of steps have
already been taken in the form of
Supreme Court orders like the ban
on diesel and petrol vehicles that are
15 years old and above in the
National Capital Region (NCR) and
also the ban on sales of BS-III
vehicles in the country effective
from 1 April 2017.
Recycling in itself is a huge
industry that process used cars,
appliances, even old buildings,
bridges, stadiums, and ships. The
recyclable material is
remanufactured to reuse. It is
manufactured into commodities by
the metal recycling industry and is
used as feeder or raw material for
plant and factories.
Niti Aayog and Steel Ministry
jointly stated that, "We have a huge
wealth in the form of metal
scrap...We are working on Metal
Recycling Policy”.
Vijay Kumar Saraswat, member, Niti
Aayog said that, "We want to look
at scrap management in an
organized manner. Why can't we set
BY SUNIL PARKEINDUSTRY
up multiple scrap
centers in every part of
the country where
people can deposit old
cars, old fridges, and
washing machines and
get the right price?"
According to the
scientific research a
high level of positive
impact is observed from
recycling on the
environment that includes
1. Scrap recycling reduces greenhouse
gas emissions
Energy saved using recycled materials
is up to:
— 92% for aluminum 90% for
copper 87 for plastic
— 68% for paper 56% for steel 34%
for glass
2. Scrap recycling conserves natural
resources
Recycling one ton of:
— Steel conserves 2,500 lbs. of iron
ore, 1,400 lbs. of coal and 120
lbs. of limestone.
— Aluminum conserves more than 4
metric tons of bauxite ore
3. Cleaner air and water result from
safely removing potentially hazardous
materials and keeping them out of
landfills
— Mercury switches removed from
older automobiles
— Lead recovered from computer
monitors
The total estimated reduction in
C02 emissions from scrap recycling
globally is approximately 410 MnT
per year.
India imported 5.4 mnt scrap in
CY16. The Metals Recycling
Industry is expected to grow with
much faster rate citing the
development plans by state and
central governments. Scrap recycling
industry employ large number of
people make it one of the important
job providing sector.
The metal recycling industry's
advantages of keeping environment
safer, energy savings and emission
controls are remarkable, that will
flourish and take momentum if
favorable policies are formed to
organize and reshape the currently
unorganized sector. In India we do
not have any formal organized
Metals Recycling industry structure.
If we have laws and regulations in
place, it will sure fuel the growth of
this seemingly marginal sector.
Hope the center keeps several
parameters in mind while forming
the new policy for this environmental
friendly sector that promotes the
concept of bringing out the best out
of waste.

T
he automotive industry
today stands at the cusp
of a phenomenal
transformation in
structural design, the likes of
which has not been witnessed in
decades. At the forefront of this
change is the usage of light steel
which has proved to be
instrumental in making the modern
day automotive lighter, safer and
more fuel efficient. Path-breaking
innovations in steel processing to
forge high tensile steel has
disrupted traditional techniques of
structural engineering, opening the
doors to an all new era of
transportation.
Automobiles in rear view!
Speak to an auto sports enthusiast
or a Formula One fan and one
would be told that lighter the
vehicle faster it goes; And
understandably so. Does that mean
after years of technical
advancements in automotive
engineering the present day
automobiles are lighter than those
a few decades back? As startling
as it may sound; the answer would
be no. On the contrary,
automobiles weigh almost twice as
much as they weighed four
decades back.
The initial models of world's most
successful vehicles, which are
zipping across city streets today,
were between 40 to 45 per cent
lighter than the present day
models. To bring this fact into
BY RAMON BURNSSTEEL
perspective, the latest edition of the
Toyota Corolla, the model E140,
weighs at around 1300 Kg, 43 per
cent heavier than its 1970
predecessor Corolla E20 which had a
curb weight of just 730 kg.
Similarly, released in 1959 the Mini
mark I weighed 630 Kgs while the
latest edition of the marque brand
the Mini F55 has a curb weight of
around 1,182 kg almost 47 per cent
heavier. With time car manufacturers
have been on a relentless pursuit to
add safety and comfort to
transportation thus adding additional
features which make vehicles heavier
than they have been ever before.
The way ahead: Lighter,
safe more fuel efficient
automobiles
The industry has seen more
advancements in terms of structural
design in the past three to four years
than it has seen in almost four
decades. From 1960s until 2012-13
mild steel has been the main
component in automotive
manufacturing and has contributed
between 40 to 60 per cent of a
vehicle's curb weight. And thanks to
ductility and strength of mild steel it
proved to be the material of choice
for sturdy and affordable vehicles.
But following strong public support
for fuel efficiency and pollution
control the tides have begun to
change in the recent past.
Environmental experts have blamed
automotives for contributing
significantly to environmental
degradation and an increase in
pollution levels, compelling countries
world over to tighten the noose on
carbon emissions and strengthening
environmental clearances.
These developments posed a
mammoth challenge before
automobile manufacturers to reduce
the weight of vehicles to attain better
fuel efficiency and at the same time
to keep vehicles affordable and safe.
At an average, different types and
grades of steel contribute about 62
per cent of the weight of a present
day production car. The solution to
the problem of trimming weight was
clear; go for the component that
contributes the most to total vehicle
weight, steel. The options available
included aluminium alloys which are
almost 60 per cent lighter than steel
Light steel redeﬁning
auto engineering

but twice as expensive. Carbon fiber
reinforced polymer (CFRP) was also
seen as an alternative to steel and a
key determining factor in weight
reduction of a vehicle. CFRP is
stronger lighter and more formable
than steel or aluminum but is almost
8 times more costly, rendering it
unsuitable for production vehicles,
even the ones with a hefty price tag.
The steel industry also did not wish
to lose a major chunk of the
automotive pie to other materials
manufacturers, as the auto sector
contributes to almost 12 per cent of
total steel consumption globally.
Bearing in mind the needs of the
automotive industry, major global
steel manufacturers including
National giants such as Tata Steel
and JSW along with other global
steel producers, developed a variety
of high strength steel (HSS) and advanced
high strength steel (AHSS) grades using
several different alloying elements.
Light Steel paving the way
Different variants of Light steel, within the
past three years, have made their way into
several recently developed vehicles both
nationally and globally. From the Maruti's
recently unveiled model of Swift Dzire to
Motorcycle giant KTM's sports bikes
competing in the MotoGP are all reinforced
with the strength of light steel.
Even cars built by Tesla, which have been
called the safest cars ever built, use an AHSS
variant created with Boron.
From skyscrapers to aviation
HSS and AHSS have begun to play defining
role in almost every sphere of engineering
from shaping the frames of skyscrapers to
forming vital components of aircrafts. Light
and ultra high strength steel has also been
gaining popularity in critical applications
such as aerospace and rocket science.
Features such as resistance from corrosion,
durability, strength and weight have once again made steel a preferred mettle
to work with for designers around the world.
Source: Web
Source: Web

Maximizing high alumina
iron ore ﬁnes consumption
in sinter plant
T
he main objective of
this project is to
maximize the available
Low Grade high
alumina Iron Ore fines at
economical price in Pig iron
manufacturing process through
better process optimization &
thereby achieving lowest cost of
production.
Sinter plants agglomerate iron ore
fines (dust) with other fine
materials at high temperature, to
create a product that can be used
in a blast furnace. The final
product, a sinter, is a small,
irregular nodule of iron mixed
with small amounts of other
minerals. The process, called
sintering.
Iron ore reserves in Goa are
variously estimated to be around
1000 million tonnes. The Iron ore
deposits in Goa are fines oriented.
Around 80% of the deposits are
fines and the rest lumps.
In the Pig Iron Manufacturing,
Iron Ore contributes around 40-
45% to the total Cost of Raw
material & hence the cost of Iron
Ore plays a crucial role in the
success of pig iron business. By
using the low grade iron ore
available at economical price, the
overall cost of production will
come down by 15-20%.
BY Nitesh Kumar Nirala (AGM – Operation, Vedanta Sesa Iron Ore Business
Sanjeev Tiwari (AM – Operation, Vedanta – Sesa Iron Ore Business)STEEL INNOVATION
Sintering Operation – At a
Glance…
Sintering is a process of heating of
mass of the fine particles to the stage
of Incipient fusion (temperature little
below the melting or softening point)
for the purpose of agglomerating them
into lumps.
Structural Modification,
Technology Introduction &
Process Optimization
The underlying emphasis of new
technologies is to maximize the Low
grade Iron ore fines for sinter
eliminating the use of high grade Iron
ore which are depleting faster. Several
design related modifications &
technologies were introduced in the
sinter plant to ensure the optimum
process parameters where it delivers the
maximum productivity & good quality
sinter with lowest cost of production.
Challenges
To maximize low grade iron ore fines
having high LOI & gangue material
(i.e. Al2O3 around 4%) without
affecting product sinter quality.
Product Sinter Physical
Quality to Maintain
This article attempts to clarify the
adverse effect of high alumina in iron
ore fines sinter quality, as well as the
sintering process itself. Mechanisms
responsible for the deterioration of the
low temperature reduction degradation
characteristics (RDI) of sinter due to
the increasing alumina content are
also reviewed. In addition, potential
measures to counter the adverse
impacts of alumina on sintering
performance of hematite iron ore fines
are also discussed.
With higher percentage of Al2O3 in
iron ore fines results in
Sinter Quality
Probably the most significant—
adverse effect of alumina reported to
date is on the low temperature
reduction
Tumbler index >73
RDI 24 to 28
RI 60-65

degradation characteristics (RDI)
of sinter.
Tumbler Index decreases.—
Internal fines generation—
increases.
Sintering process
High Alumina iron ore fines are
expected to demand a high
sintering temperature and a longer
sintering time to promote melt
formation. This is due to the poor
reactivity of this type of alumina
and the high viscosity of the
primary melt formed. As a result,
the fuel rate is reported to increase
and the sintering productivity to
decrease as the alumina content
increases. Industrial experience has
also suggested that for every 1%
increase in alumina content in
sinter, the coke breeze
consumption increases by 5–10
Product sinter.
— Increase in FeO (9 to 10%),
optimum FeO level to improve
RDI without compromising the
other sinter properties.
— Maintaining Alumina silica ratio
less than 0.45
— Maintaining the % of -0.5mm in
coke breeze less than 20% &
crushing index more than 90 by
proper crushing practices.
— Maintaining flux crushing index
more than 90.
— Addition of water to maintain
optimum moisture % in raw mix
with the help of moisture meter
and addition of steam in
Nodulizing drum to raise the
temperature of raw mix to prevent
the phenomena of re-condensation
at the bottom layer of sinter bed
for faster rate of sintering process.
kg/t sinter in order to raise the
sintering temperature by about
30°C.-In addition to the observed
increase in fuel rate and drop in
sintering productivity, a high
sintering temperature is expected
to cause other adverse impacts on
sinter quality due to the formation
of an unfavorable sinter structure
of poor reducibility and strength.
We have produced quality sinter
with high Al2O3 fines at much
below fuel rate than the industrial
norms with process modification
& structural changes. Machine
speed reduction & increase in bed
height has helped in achieving the
same.
Potential Measures to Improve
Sintering Performance of High
Alumina Hematite Iron Ores:
Neutralization of the Effects of
Alumina on product sinter:
— Increase in CaO & MgO % in
Fig .01

Parameters Goan ore
UOM
Fe
Mn
SiO2
Al O2 3
P
Moisture
LOI
%
54-56
1.00-1.20
6.00-7.00
4.00-4.50
0.04
~8.00
~8.00
Table1 Chemical Analysis of
the Iron Ore Sample
Table 2 Chemical & Physical Analysis of Product Sinter
24.8
DATE SHIFT Fe FeO CaO Al O2 3 SiO2 MgO Al O / SiO2 3 2 BASICITY MEAN SIZE TI RDI
10.01.2017
10.01.2017
10.01.2017
11.01.2017
06.03.2017
07.03.2017
I
II
III
I
I
III
50.45
49.80
49.24
49.43
52.23
51.77
8.96
10.11
10.84
10.55
10.21
11.64
12.11
12.96
13.14
12.76
11.04
11.22
4.60
4.80
4.81
4.61
3.59
3.90
7.42
7.88
7.98
7.97
7.20
7.21
2.39
2.57
2.44
2.53
2.69
2.54
0.62
0.61
0.60
0.58
0.50
0.54
1.63
1.64
1.65
1.60
1.53
1.56
26.04
22.88
21.55
21.74
21.74
23.02
73.52
73.36
73.73
73.94
74.80
73.53
Local Goan ore fines
Consumption Trend (%)
Local goan ore
fines consumption
(%), 2014-15, 77
Local goan ore
fines consumption
(%), 2015-16, 90
Local goan ore
fines consumption
(%), 2016-17, 95
Local goan ore
fines consumption
(%), 2013-14, 0
alumina content are expected to
take a longer time to sinter. It is
common industrial practice to
raise the fuel rate as alumina
increases. Alternatively, deep bed
sintering may be used. Compared
with the temperature profile of
conventional sintering, deep
bedsintering allows the sinter bed
to be kept at elevated
temperatures for a longer time.
This may eventually allow
alumina minerals extra time to
react and assimilate with the
primary melt.
— So In order to reduce coke
Fig.02
— Selective Granulation &
Segregation (Horizontal &
vertical) of raw mix on sinter
machine pallet car for ensuring
proper U profile loading on
sinter bed. This reduces the air
filtration velocity near side
plates thus reducing RIM-
ZONE effect.
— Optimization of Sintering
Process: Due to the low
reactivity of some alumina
bearing minerals and the high
viscosity of primary melts
with high alumina content,
sinter blends with high
breeze consumption than the
industrial norm, we have increased
the sinter machine pallet car bed
height from 650mm to 750mm by
structural modification and also
reduce machine speed to maintain
VSS. This has given a positive
result in optimizing coke breeze
consumption at good strength sinter
with high Al2O3 fines. Proper
segregation of hot sinter on cooler
to ensure bigger particle at the
lower layer for better cooling
efficient cooling is believed to be
necessary to reduce the exposure of
sinter to high temperatures.
The entire manufacturing process is optimized which helps us to maximize the high alumina Goan Ore fines
consumption from fewer up to 95% which helps us to maintain at a low cost pig iron manufacturer among the
competitors. This also help us in survival of the business in the bad times.
RESULT & CONCLUSION
Characterization Studies
STEEL INNOVATION
Disclaimer: The views, designs and information published herewith have been provided to Steel 360 by the author of this article, the purpose of which is solely educational so as to
share a general understanding of the process. Steel-360 bares no responsibility of patent or copyright infringement with regard to the content of this article and neither does the
magazine or its editors substantiate the authenticity or credibility of the information provided herewith.

Company
Company
Name
Name
Region
Region
Item Description
Item Description
Quantity
Quantity
Grade
Grade
Tender/
Tender/
Auction/
Auction/
EOI
EOI
Due Date
Due Date
For more information on tenders, you may visit www.steelmint.com/tenders
IndianTENDERS
JUNE2017 TENDERS
GlobalTENDERS
Vol V Issue 12 June 2017
MDL Maharsahtra Purchase of MS Bar 541.917 MT Mild Steel Tender 1-Jun-17
MDL Maharsahtra Purchase of CS Plate 4,703 MTR Carbon Steel Tender 1-Jun-17
PGVCL Gujarat Purchase of MS Angle 58,341 MT Mild Steel Tender 1-Jun-17
SAIL Chattisgarh Purchase of Ferro Manganese 3,000 MT Manganese : 70.0% Min Tender 1-Jun-17
BHEL Uttar Pradesh Purchase of MS Pipe 242 MT Mild Steel Tender 2-Jun-17
ECL West Bengal Loading and Transportation of Coal 30,871.53 MT Mixed Tender 2-Jun-17
MMTC Odisha Sale of Non-Alloy Pig Iron of Indian Origin 30,000 MT C : 3.6 - 4.3%; Tender 2-Jun-17
Tarang Export Maharsahtra Sale of Direct Reduced Iron 5,000 MT DRI B Tender 4-Jun-17
UPPTCL Uttar Pradesh Purchase of Beehive Hard Coke 400 MT GCV 5640 Kcal/Kg Min Tender 5-Jun-17
ONGC Gujarat Auction of Ferrous Scrap 222.8 MT Mixed Auction 5-Jun-17
IOCL Odisha Auction of MS Scrap 100 MT Mild Steel Auction 5-Jun-17
KIOCL Karnataka Sale of Pellets 600,000 MT Fe:63.00 % Tender 5-Jun-17
KIOCL Karnataka Purchase of Iron Ore Concentrate Hematite 600,000 MT Concentrate Hematite Tender 5-Jun-17
IOCL Odisha Auction of Steel Scrap 236.5 MT Mixed Tender 6-Jun-17
WCL Maharsahtra Loading, Unloading and Transportation of Coal 93,000 MT Mixed Tender 7-Jun-17
IOCL Odisha Auction of Steel Scrap 236.5 MT
-
Mixed Auction 7-Jun-17
STC Delhi Purchase of Iron Ore
Fines, Concentrate,
Pellets and Lumps
EOI 12-Jun-17
MRPL Karnataka Purchase of MS and HR Plate 180 MT IS 2062 Tender 12-Jun-17
Midhani Telangana Purchase of MS Scrap 500 MT Mild Steel Tender 13-Jun-17
MOIL Maharsahtra Purchase of Iron Ore 1,000 MT Fe : 62% Tender 13-Jun-17
Indian Railway Delhi Purchase of Ferro Manganese 111.810 MT Tender 16-Jun-17
SAIL Chattisgarh Purchase of Iron Ore Pellets 60,000 MT Fe : 57%-62% Tender 20-Jun-17
NALCO Odisha Purchase of MS Cathode bar 1,342 MT Mild Steel Tender 21-Jun-17
UPRVUNL Uttar Pradesh Transportation of Coal 45,550 cub meter Mixed Tender 24-Jun-17
MMTC Delhi Purchase of Chrome Ore 25,000 MT Cr : Fe ratio 2.4 : 1 Tender 25-Jun-17
RINL/VSP Andhra Pradesh Purchase of Silico Manganese 6,500 MT Size 40-100 mm Tender 30-Jun-17
RINL/VSP Andhra Pradesh Empanelment of Suppliers for Ferro Silicon 7,500 MT Silicon: 70.0% min Tender 30-Jun-17
MSTC West Bengal Empanelment of Suppliers for Purchase
of Non Coking Coal
Imported- Tender 1-Jun-17
RINL/VSP Andhra Pradesh Purchase of Imported Boiler Coal 100,000 MT GCV 5,800 -6,300 Kcal/Kg Tender 7-Jun-17

28 JUNE 2017 STEEL360INDIA
J
apan's steel industry
which was torpid for
sometimes is showing
signs of reigniting as big
producers seize domestic demand
for construction and automobiles,
though unpredictable conditions
overseas remain a concern.
Japan produced 8.9 million metric
tons of crude steel in March
2017, an increase of 1.8 percent
compared with March of the
previous year. Crude steel output
for fiscal 2016 rose 0.9% to
105.16 mnt , the first gain in
three years, data released
Thursday by the Japan Iron and
Steel Federation shows. Output
for March grew 1.8% on the year.
Nippon Steel & Sumitomo Metal,
JFE Steel and other
manufacturers are nearly at full
production. The 2020 Tokyo
Olympics are expected to spark a
surge in construction orders, and
Japanese automobile production is
also strong.
"There should be mild recovery in
fiscal 2017 as well," said an
executive vice president at
Nippon Steel. Steelmakers aim to
capture increasing demand for
lighter cars. Nippon Steel plans to
boost capacity 20% for
lightweight sheet used in
It also comes as steelmakers around
the world grapple with the fallout of
massive exports of cheap steel from
China, with producers there turning
overseas as the local appetite wavers.
The chairman of the Japan steel
industry body, told a news conference
that "Domestic demand will certainly
increase next fiscal year thanks to
higher capital expenditure and
consumer spending ahead of the
planned sales tax hike in 2017, on
top of Olympic-related construction
demand,"
Japan plans to raise its sales tax to
10 percent from 8 percent in April
2017. The country is also gearing up
to host the Olympics in 2020. Japan's
crude steel production has been in a
downtrend since late last year,
pressured by slack consumption of
cars and houses after a sales tax hike
in April 2014.
Construction-related companies are
gearing up for a busy few years as
Japan prepares to host the 2020
Olympic Games in Tokyo. Credit
Suisse expects the construction boom
to continue beyond 2020, however,
the credit goes to public
infrastructure projects and a rise in
property prices that has reinvigorated
private-sector activity.
While construction companies and
cement makers are already raking in
Japan's Steel Industry
out of Hibernation
automobiles at its Yawata works in
Fukuoka Prefecture. Kobe Steel has
also started producing a similar type
of steel.
JFE Steel has developed pipe thicker
than that of Japanese peers, for use
in the pillars of buildings. Builders
can use fewer pillars and augment
the amount of usable space,
broadening layout possibilities, the
JFE Holdings unit says.
Yet conditions in China, the U.S. and
elsewhere could impact Japan's steel
production. China, despite declaring
it would cut excess capacity,
produced a record 72 mnt of crude
steel in March, up 1.8% on the year.
U.S. President Donald Trump favors
American-made products. Should
China, which makes more steel
products than any other nation,
decrease its U.S.-bound exports, then
leftover steel could end up circulating
in Japan and elsewhere in Asia,
dampening market conditions.
"Future trends are getting harder to
predict," said an official at a Japanese
blast-furnace steelmaker. That tepid
outlook from the Japan Iron and
Steel Federation follows a string of
weak signals on the country's
economy that have raised doubts
about government efforts to reignite
growth and end decades of deflation.
"Domestic demand will certainly increase next ﬁscal thanks to higher capital expenditure and consumer
spending ahead of the planned sales tax hike in 2017, on top of Olympic-related construction demand,"

7.8
8
8.2
8.4
8.6
8.8
9
9.2
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
CY 16 CY 17
record profits, profit growth will
likely slow over the next few years,
and capital allocation strategies will
become increasingly critical to
valuations. Just like in the Olympics,
there will be winners and losers
among the stocks of companies
hoping to win big.
Japan's Infrastructure
Projects Set for New
Heights
Analysts on Credit Suisse's Global
Markets team forecast annual
construction investment rising from
¥50 trillion in 2015 to ¥55 trillion
by 2025. Over the next three years,
the Bank expects ¥270 billion in
spending on the Olympic Village and
other athletic facilities, including
construction of the National Olympic
Stadium which started in December
2016.
A host of public infrastructure
projects will also bolster investment.
The government is funding ongoing
work to shore up earthquake-prone
structures, and Japanese politicians
approved a supplemental budget for
further earthquake reconstruction
earlier this year. Public dollars are
also funding the construction of two
major highways, the Tokyo
Metropolitan Expressway and Tokyo
Gaikan Expressway. The Ministry of
Land, Infrastructure, Transport and
Tourism is forecasting that spending
on infrastructure maintenance will
rise from ¥3.6 trillion in 2013 to as
much as ¥5.5 trillion in 2033, by
which time 50 percent of the
country's bridges, tunnel, flood-
control barriers, and coastal
structures will be at least 50 years
old.
The Linear Chuo Shinkansen Line, a
high-speed maglev (magnetic
levitation) train line that will connect
Nagoya and Osaka when it opens in
2045, is a collaboration of the
government and a host of private
railroad companies. While the first
leg, between Tokyo and Osaka, isn't
slated to open until 2027, the East
Japan Railway intends to redevelop
the area around Tokyo's Shinagawa
station before then, funding the
construction of seven towers
containing office, commercial and
residential facilities. So lots of
infrastructure activities are on the
move where steel industry will be
benefitted.
Credit Suisse believes private
investment will rise 2 percent over
the next few years, only half as fast
as public investment. But even that's
an improvement: Private
nonresidential construction starts
declined in the fiscal years ending
in March 2015 and 2016, but
moving averages show construction
starts are starting to trend higher.
Meanwhile, new construction prices
have been climbing since 2011.
Japan Crude Steel Production in Apr'17
Source: SteelMint
Quantityinmilliontonne

S T O R Y
COVER
By Steel360 Bureau , Inputs by Ruchira Singh

GST; over Hauling the
Indian Tax system
Goods and service tax is taking
India by the hurricane. GST will
bring in “One nation one tax” to
unify indirect taxes under one
umbrella and facilitate Indian
businesses to be globally competitive
The rates for Good and Services Tax
(GST) have been finalized by the
GST Council for nearly all goods
and services produced and consumed
in the country.
There would be essentially 4 tax
slabs – 5%, 12%, 18% and 28%,
under which the country’s goods and
services would be taxed by the
Centre and the State. The majority
of goods and services will be taxed
at a rate of less than 18%. Further, a
number of goods and services have
been exempted from the tax
structure and for a handful of goods
the tax rate is yet to be finalized.
India has adopted a dual GST
model, where there will be 2 levels
of taxes that would be levied
separately by the Central
Government and State Governments.
Both the Central and State GST
would be levied concurrently.
A land Mark Tax
GST is definitely the biggest tax
reform in the country and
government is not leaving any space
to ensure that taxpayers are ready
for the new regime. GST is a win-
win situation for the entire country.
It brings benefits to all the
stakeholders of industry, government
and the consumer.
What does GST mean for Indian
steel industry?
Life in the new GST regime will see
faster production, wider markets and
cost savings as a result of simplified
taxation. Coming after anti-dumping
duty and thrust on local use of steel,
this is the largest boost in recent
times, but will it help cut debts,
improve low per capita consumption
and bring in cutting-edge
technology?
Investment in mining to jump—
as iron ore, coal GST lower at
5% from 12%
Taxes for steel, iron firms to—
fall by up to 2 percentage
points
No let-up in competition -—
small, large steel firms roll up
sleeves to fight for market
—
Largest producer JSW says—
will pass on savings to
customer, setting outlook for
lower prices
Larger problem of debt and—
bad loans to get marginal help
from GST
Low per capita steel—
consumption, lack of state-of
the art technology won’t be
helped by GST
Faster, smarter and digital – these are
the new age mantras and it is little
wonder that these have now come to
touch upon one of the oldest
industries in the manufacturing sector
– steel making.
Come July 1, India will impose the
Goods and Services Tax (GST) across
the board, with the exception of
petroleum sector and even though it
is long delayed, all companies are
scrambling to get a head start in the
new regime.
A landmark policy that took 10 years
in the making, the GST is being said
to be the biggest reform since the
liberalization in the early 1990s, and
the first real tax reform in the archaic
tax system.
“We are looking at it with a lot of
excitement… it is definitely a
transformational change,” said
Seshagiri Rao, Joint Managing
Director and Group Chief Finance
Officer, JSW Steel Ltd, the largest
steel producer in India in a telephonic
interview. “The benefits would come
down to the customers.”
The top five steel makers that
account for about half of India’s
production have formed teams with
“We are looking at it
with a lot of
excitement… it is definitely
a transformational change”
“The benefits would come
down to the customers.”
“GST is a welcome step, one
which would benefit
companies clean up the
industry”
”
”
- SANDEEP JAJODIA
Seshagiri Rao

STORY
COVER
their people not just from the
finance department, but across
other divisions as well to assess
this new system which will need
changes in the very core of the
business – production and
marketing.
These teams have buried their nose
for the last several months into
data to estimate how the
production cycle may be shortened,
the interest rates lowered and a
breakthrough attained to new
markets in the country itself.
“Cross functional teams have been
formed within the company to
study the impact on business
functions with the onset of GST,”
said Chanakya Choudhary,
Group Director, Corporate
Communications and Regulatory
affairs at Tata Steel Ltd said in
replies to a questionnaire.
“Business functions and IT systems
are being re-engineered and /or
reconfigured to meet the
requirements of GST,” he added
without elaborating on the cost and
time such a drive would incur.
All unanimously agree this
landmark development has
unshackled them from the nitty-
gritty indirect taxes they have been
paying all along –Value Added Tax,
Excise Duty, Central Sales Tax,
Entry tax, etc – different taxes for
different collectors.
While all that added up to19% or
more tax, the government’s GST
Council in a meeting in Srinagar on
May 18, set a single rate of 18% for
steel. On mined raw material such as
iron ore and coal, the GST Council
set a rate of 5%, as against 12%
earlier.
How it can help
GST has an inbuilt mechanism of
invoice matching and tax payments as
well as tax credits are monitored and
controlled by a robust IT driven
system, those involved in the
preparation said.
“… unaccountable sales will not exist
as each dealer has to upload data at
the invoice level into the GSTN
(Goods and Services Tax Network)
system to enable the recipient of the
supply of goods or services to avail
credit of any GST paid by the
supplier,” said Shivram Krishnan,
Director, Commercial, Essar Steel.
When compared to the outgoing
system, tax in new regime will be
down by up to two percentage points,
estimate by the industry shows.
Companies will be saved the hassle
of underhand dealings and with of the
queues on the highways gone, raw
material and finished goods are
expected to move much faster. As a
result, the cycle of procuring and
storage of raw materials can shorten.
Working with smaller and faster
moving inventories can lessen the
amount of working capital, which in
many cases is taken from banks. This
is in turn can lessen interest rates.
If the government’s One Nation One
Tax slogan really plays out as per
script and states don’t create any
Intra-State Supply
‘A’ sold to ‘B’ of Mumbai ‘B’ sold to consumer in Mumbai
Particulars Rs. Particulars
100.00 Sale PriceSale Price
CGST@ 9% 9.00 CGST@ 9%
SGST@ 9% 9.00 SGST@ 9%
Total Price 118.00 Total Price
Collected by
Central Govt
at this stage
9.00 Total collection by Central Govt
= Rs. 9
= Rs. 9
= Rs. 4.50
= Rs. 4.50
Collected by
Maharashtra
Govt at this
stage
9.00 Total collection by Maharashtra Government
Amtpaid through SGST
Amtpaid through SGST
Amtpaid in cash
Amtpaid in cash
Note: Standard rate of 18% has been taken. 9% CGST and 9% SGST
Rs.
150.00
13.50
13.50
177.00
13.50
13.50
‘A’ of Delhi sold to ‘B’ of Mumbai ‘B’ sold to consumer in Mumbai
Collected by
Central Govt at
this stage
Total collection by Central Govt
= Rs. 13.50
= Rs. 4.50
= Rs. 0.00
= Rs. 9.00
Collected by
Maharashtra
Govt at this
stage
Particulars Rs. Particulars Rs.
Sale Price Sale Price100.00 150.00
IGST @ 18% CGST@ 9%18.00 13.50
– – SGST @ 9% 13.50
Total Price Total Price118.00 177.00
18.00
à
à
Amtpaid in Cash
Amtpaid in Cash
Amtpaid through IGST
Amt paid through IGST
à
à
13.50
13.50
–
Total collection by Maharashtra
Government
Inter-State purchase and Intra- State supply

entry barriers in new forms, new
markets will emerge for
steelmakers within India.
“JSW for instance, that has a
wider presence in south and east
India, would aim to capture
markets in the north and west
which is mainly a market for
construction steel products such as
longs,” Rao said.
Logistics related savings may also
lie ahead with goods moving
faster, according to a senior
analyst.
“Reorganization of warehouses and
depots will happen and possible 5-
10% reduction in transport costs,”
said Rakesh Arora, Managing
Partner at Go India Advisors.
Companies transferred inventories
between branches to save some
taxes, which now they would not
have to therefore eliminate the
running costs and staff costs of
these warehouses and depos. Other
advantages – the tax payer now
has a 50-day window for payment
of GST as against the monthly one
in the outgoing regime, according
to a tax consultant engaged in
making companies GST compliant.
Competition heats up
Large players are eyeing the market
of small players who promise to
not just hold on to their turf, their
steely resolve intact, but also snip
at the heels of their competitors.
All are buoyant and feeling
empowered by the GST despite the
last few years of debts,
unprofitability, debt restructuring
and prospects of closure. GST has
brought in a sentiment of
overcoming hurdles.
“They say cockroaches existed at
the time of dinosaurs and they
survived while dinosaurs became
extinct… we have that kind of
resilience,” said CA Kamal
Aggarwal, Director of Prayash
Steels Pvt Ltd, a mild steel ingot
manufacturer in Raipur.
Most of the industry members said
that small mills can come back to
life with the increase in their
margins.
The head of small-sized integrated
steel producer Monnet Ispat and
Energy Ltd is hopeful that its
lenders that are looking at
proposals for buying out the
company will consider the proposal
of the current management and let
them continue to keep it with a
favorable debt restructuring.
“GST is a welcome step, one which
would benefit companies clean up the
industry,” said Sandeep Jajodia,
Chairman and Managing Director
of Monnet Ispat.
“The unorganized sector has been
resorting to malpractices which make
it difficult for the organized sector…
It takes away their competitiveness,”
Jajodia said. “Healthy competition in
the new system will be welcome.”
Not all believe the small producers
may get back to health. A tax
consultant engaged in advising
companies on GST said many
companies indulging in malpractices
may be vulnerable to the past
accounts being scrutinized in which
their tax evasion may be apparent.
Competition from imports would stay
just as before with GST applying to
imported steel as well. Exports of
steel will attract central, state and
municipal taxes in addition to a 4%
customs duty, according to the
estimates by one industry member.
“None of the schemes like MEIS,
Duty Drawback are able to reimburse
or neutralize the losses caused,” said
one executive on the condition of
anonymity.
Taxes would be to the extent of 7-9%
including clean energy and coal cess,
National Mineral Exploration Trust
(tax), central sales tax on inputs and
others.
Win-win for all?
But would the lower taxes mean the
government’s indirect tax collections
may fall?
‘A’ of Mumbai sold to ‘B’ of Mumbai ‘B’ sold to consumer in Delhi
Collected by
Central Govt at
this stage
Total collection by Central Govt
= Rs. 9.00
= Rs. 9.00
= Rs. 9.00
Collected by
Maharashtra Govt
at this stage
Particulars Rs. Particulars Rs.
Sale Price Sale Price100.00 150.00
CGST@ 9% IGST@ 18%9.00 27.00
SGST@ 9% 9.00 -- --
Total Price Total Price118.00 177.00
9.00
à
à Amtpaid through SGST
Amtpaid in Cash
Amtpaid through CGST
à
27.00
9.00 Collection by Delhi Government : SGST share
of IGST as per Article 269A
Intra-State Purchase and Inter-State supply
Inputs: Abhishek Tibrewal

STORY
COVER
Industry experts said the tax
collections, far from falling, may
actually rise as under-invoicing
may come down. With the full
chain of miner-producer-
consumer coming on to a digital
system of taxes, corrupt practices
may fall.
“With so many different taxes,
there was a tendency that at
each stage people hid facts,” said
Sushim Banerjee, director
general at Institute for Steel
Development and Growth
(INSDAG). “There were multiple
points were evasion of taxes had
been happening.”
According to Banerjee as well as
the executives in the steel
companies, the government’s
collections would rise and this
would accrue indirect benefits as
the government may spend more
on infrastructure.
In short, a win-win for both
companies and the government,
conceptually at least.
The industry is hopeful of good
sales owing to the large
infrastructure and defense sector
push by the government as well
as the thrust for downstream
products by some of the top
players. Companies are targeting
rural market and coming up with
tailor made steel products such
as steel doors and other
customized products.
INSDAG sees this year’s steel
production rising by 6% as
compared to 2.6% growth last
year. “There are a lot of mega
projects coming up such as rail,
metros, dedicated freight
corridor, Sagarmala…,” said
INSDAG’s Banerjee said.
GST & Steel industry
Once the GST is implemented the
Steel industry is utmost benefitted,
most of the unaccounted sales will
come to an end, the input cost will
come down once the GST is rolled
out; costs will fall and there will be
more clarity on cash flows. This will
also help the steel companies
overcome their NPA problems and get
credit more easily.
Whether it is intrastate or interstate
sales, everything will come under
18% tax in GST for steel, as all other
taxes get dissolved like the excise,
VAT, CST, entry tax. Currently, a
purchaser is not entitled to take credit
of CST of 2% and Entry Tax of 1%.
Though the tax rate under GST shall
be higher in case of Inter State trade,
the complete Tax component shall be
an eligible input tax credit and would
not form part of the cost.
Current position of
steel industry
Currently, the domestic steel sector
facing anemic demand, unprecedented
imports at predatory prices were
primarily responsible for the
prolonged bad patch of the domestic
steel firms. Though there had been
dramatic reduction in the imports,
thanks to imposition of a series of
tariff and non-tariff measures by the
government, and the recent anti-
dumping measures to stop the threat
of imports at predatory prices
particularly from China, Japan and
Korea is not over yet.
The growth in the Indian steel sector
has been driven by domestic
availability of raw materials such as
iron ore and cost-effective labor. The
steel industry is the highest leveraged
sector in India and banks are not in a
position to extend fresh loans.
GST Simplified
GST is a consumption tax that is
collected on sale of manufactured
goods and services. Since it is a
consumption tax it is passed on until
the last stage, wherein the customer
bears the tax, just like excise duty is
imposed currently. Dual GST in India
is to be levied concurrently by states
and central government on a
common tax base. It will be levied
on all stages of the supply chain till
the final sale to consumers, providing
input tax credit(ITC) benefits on the
basis of invoices issued at the
previous stage of the supply chain.
Destination Based
Consumption Tax
Destination based consumption tax
means that state and central taxes
levied at different stages of the
supply chain will be totally shifted to
the final destination, consumers, and
the destination state will get the full
SGST paid by its residents.
CGST Central Goodsstands for
and Service Tax and SGST stands
for State Goods and Service Tax
both shall be on Intra – State
supplies of goods or services in
India.
IGST Integrated Goodsstands for
and Service Tax shall be on Inter
State supplies of goods or services in
India‐ levied and collected by the
Centre. (IGST shall be sum of CSGT
and SGST)
GST in other Countries
France was the first country to
implement GST to reduce tax-

evasion. Since then, more than 140
countries have implemented GST
with some countries having Dual-
GST (e.g. Brazil, Canada etc.)
model. India has chosen the
Canadian model of dual GST. India
will join 160 nations that have a
value-added tax, including Poland,
Canada and Japan. At the top rate,
India's GST will be among the
highest. All around the world, GST
is a destination based tax on the
consumption of goods and services.
It is thus conceptually similar to that
India. In some countries, VAT (value
added tax) is the substitute for GST.
At present, Australia, Canada,
Singapore, New Zealand, Jersey
(UK), Malaysia, Indonesia and
Pakistan have a GST system while
other countries have a VAT system
in place. Most countries, while
imposing VAT, have not been able to
entirely do away with other indirect
taxes. Various other duties continue
to exist.
Will GST bring
the change?
® The cash based sales with
most of the mid size & small
industry will be reduced, as
there will be less incentive to
sell in cash.
® Most of the cost effective
companies & states,
especially States which has
direct access to raw material
used to have a due advantage
over the non-producing states
but under GST everything will
fall under one tax umbrella.
® Net prices to end user may
come down slightly
® GST will increase collection
of taxes, which is turn will
increase overall
infrastructural development
Businesses now have their eyes on
July 1 as the GST will be
implemented. The extent to which
manufacturers will gain from the
consolidation of taxes under GST
will depend on the complexity of
their product. While the product and
service-specific GST rates will be
known only after a few weeks and
most manufacturers have done their
calculations.
Steel industry has been in an
overcapacity in the last few years.
India's steel production was around
97 million tonnes in 2016-17 as
against an installed capacity of
around 128mnt. And yet the
government set the target for
production at 300 mnt by 2030.
The government has periodically
helped the industry – in the recent
months, the new steel policy
enabled more use of local steel, and
an increase in the allocation for
infrastructure spending and an anti-
dumping duty on imports.
But how much could GST help the
industry in dealing with some of the
larger problems of the industry – a
India has chosen the
Canadian model of
dual GST. India will
join 160 nations that
have a value-added
tax, including Poland,
Canada and Japan.
Utilization of Input Tax Credit (ITC)
ITC
CGST IGST SGST IGST IGST CGST SGST
CGST SGST IGST
reported outstanding loan of over
INR 3 trillion, a low per capita
consumption of steel at 60 kg per
annum and absence of higher
technology such as Finex.
Though the debt stockpile may not
substantially reduce, and
consumption of steel will be driven
by other forces, the GST will be a
big help in tidying up the house.
Steel industry in post GST will
witness reduction of logistics cost &
time, generation of employment in
undeveloped states, utilization of
natural resources, protection to
domestic industry, reduction in
production cost and a host other
government initiatives, which will
overall give full impetus to Indian
steel industry.

STORY
COVER
China
10
Australia
10
Brazil
5
Canada
20France
17
19Germany
India
18
10
Indonasia
8Japan
20
UK
10
Korea
6Malaysia
16
Mexico
21
Netherlands
15
NewZealand
Pakistan
17
18
Russia
7
Singapore
8
Switzerland
7Thailand
5
Jersey(uk)
StandardGST/VATRates
Note:*TheGSTstructurerangesbetween5%-28%withmajoritytocommoditiesfallingunder18%bracket.
Source:OECD(2016)andCBEC

South Africa
Mn ore Export
CY’16 Vs CY’17
50%
CHANGE
China
Q1'2016
1,302,374
Q1'2017
1,953,476
35%
CHANGE
04%
CHANGE
296%
India
Japan
Malaysia
Q1'2016
Q1'2016
Q1'2016
Q1'2017
202,535
235,615
40,285
44,572
Q1'2017
Q1'2017
Q1'2017
Q1'2017
273,198
245,430
159,365
154,246
CHANGE
Russian
Federation
246%
CHANGE
South
Korea
Norway
France
10%
CHANGE
Q1'2016
139,213
Q1'2017
153,621
01%
CHANGE
No
CHANGE
Q1'2016
Q1'2016
Q1'2016
Q1'2016
123,520
-
30,859
3,979
Q1'2017
Q1'2017
Q1'2017
Q1'2017
124,500
122,489
77,914
67,225
152%
CHANGE
Australia
Singapore
Quantity in MT Source: SteelMint
South
Africa
1589%
CHANGE
BY AAMEER SAYEDINFOGRAPH

S
teel is undoubtedly the
most indispensable
material in the modern
day technology driven
society. It has been in use for over
a thousand years and has been
produced in various ways, be it
through the use of iron ore, coke
and fluxes or be it through the use
of scrap.
Steel is considered timeless as it is
100% recyclable. According to the
World Steel Association, the
recovery and use of steel industry
by product reached a worldwide
material efficiency rate of 97.3%.
The global scrap consumption in
2015 stood at 650 mnt (million
tons). While the global seaborne
trade of scrap stood at around 84
mnt in 2015 (about 7 mnt per
month).
Scrap has become an important
component in Chinese steelmaking.
Between 2010 and 2015 where the
crude steel production grew by
26%, the scrap consumption for
making crude steel grew by almost
34% (fig1). The production of crude
steel in China in 2015 stood at
803.83 mnt of which 6% was
through EAF, amounting to around
48.23 mnt. The IF route produced
around 40 mnt of crude steel while
the figure for the BOF route stood
at 715.60 mnt.
The scrap intensity in EAF route in
China is around 550 to 600 Kg/
Ton, at a charge level of 600 Kg /
Ton this translates into 28.94 mnt of
scrap usage in the EAF route of
steel production.
In the IF route, the scrap intensity
is around 1000-1100 Kg per ton of
crude steel made. At 1000Kg per
ton of crude steel, this translates
into 40 mnt of scrap usage for 40
SET TO DISRUPT
WORLD SCRAP TRADE
DYNAMICS
CHINA
BY V. K. Shrivastava
S T O R Y
COVER
Chinese scrap has slowly and steadily started
ﬁnding its way into the global scrap market.
With the likely closure of scrap fed mills, the volume of
scrap reaching the market will reach a level where there
will be huge structural disruption in the global scrap
market, both in terms of trade and pricing. Will this
disruption last for a short period or will it alter the
market dynamics sine die”.

mnt of crude steel produced through
IF route.
The Iron and Steel foundries in China
are reported to have consumed about
15mnt of scrap to generate about 30
to 35mnt of foundry products.
As per McKinsey report, the total
scrap consumption in China in 2015
stood at 180 mnt. This translates into
96.06 mnt of scrap used in BOF
route at a scrap intensity of 134 Kg
per ton of steel produced.
Argus Steel Feedstocks dated April
25, 2017 states
Ground reports confirm
that the authorities are
actually in the field to
dismantle the scrap fed
mills particularly the
Induction Furnaces and
already idle Electric Arc
500
1,000
1,500
2,000
0
2000 01 02 03 04 05 06 07 08 09 10 11 12 13 14
576
800
1,034
1,21243
57411
526
604
640
71
70
4.3% p.a.
Scrap
Direct
reduced iron
Pig iron
1 Absolute value of metallic consumption based on crude steel output, taking into account
(I) typical Fe content in metallic and (ii) Fe losses in the steel making process
Metallics consumption by iron source
1
MMT 2000-15Growth
Percent
3.1
3.3
5.1
2015
SOURCE : worldsteel; midrex; Mckinsey analysis
Furnaces. The deadline for the
closure of such scrap fed mills is
June 30, 2017
What happens if the Chinese
authorities succeed in achieving what
they have set out for by the due
date?
Likely Scenario
If the Chinese authorities succeed in
achieving what they have set out for
by 30th June we are looking at an
inflow of almost 5.75 mnt of scrap in
the market, over and above the 7 mnt
already available. And if they
succeed in demolishing only the IF
World Scrap Consumption (Excluding China)
Chinese Scrap Consumption
World Scrap Consumption : 2015
470
mnt
28% 180
mnt
capacities by the due date then we have
a situation wherein about 3.33 mnt per
month of scrap suddenly becoming
available for trade.
Scrap Availability for Trade140
60
120
Quantityinmilliontonne
Excluding
Chinese Scrap
Including
Chinese Scrap
Source: SteelMint
40
100
20
80
0
84 84
124
40
mnt mnt
mnt
mnt
In either situation, we are staring at a
bloodbath on the scrap price front and
severely altered dynamics of global
scrap trade.
This sudden influx will lead to sharp
drop in prices of ferrous scrap, totally
altering the trade dynamics. In Asia,
the scrap trade emanating from US,
Europe and Middle East will become
unviable owing to logistic costs
involved. A recent manifestation of
this has been scrap export to Vietnam
from China, wherein the price of
scrap sold was USD 175 FOB China
against price of USD270 / Ton CNF
Vietnam. During the week of May 8,
Taiwan was reported to have booked
Chinese origin shredded grade scrap at
USD 240 CFR Taiwan ( Since China
has 40% export duty on scrap and
assuming USD 5 as the freight the
effective FOB price comes at USD
167) . On May 10th it was reported
that Japanese steelmaker Kyushu
Works received a small shipment of
scrap from China.
As per Platts, regional scrap importers
Tokyo Steel and Taiwan's Feng Hsin
have ordered trial lots of Chinese
scrap, while South Korea's Hyundai
Steel is inspecting scrap in China this
month. Chinese material has even
been offered into India, with talk that
some containerized sales have been
completed.
Chinese Crude Steel Production &
Corresponding Scrap Consumption in 2015
Induction Furnace Route 40.00 mnt
Crude Steel
40.00 mnt
Scrap
Electric Arc Furnace Route 48.23 mnt 28.94 mnt
Foundries - 15.00 mnt
Basic Oxygen Furnace Route 715.60 mnt 96.06 mnt
Total 803.83 mnt 180.00 mnt
”
“The provinces have been
instructed to cut oﬀ power and
water supplies to scrap-fed mills
and demolish induction and
electric arc furnaces to ensure
operations do not start.”
Source: McKinsey

The question remains where this extra
scrap generated per year will be
consumed. Will China setup EAF
capacities to consume the extra scrap?
Highly unlikely. Electric Arc Furnaces
require a good amount of electrical
power to operate, and the present
power situation of China does not
permit the same. Can China consume
the increased quantities of scrap in
steelmaking through BOF route? a
small quantity yes, but not the whole.
The reasons being currently the scrap
intensity in Chinese BOF is around
134Kg/Ton of crude steel produced, in
most developed steelmaking facilities
this figure is as high as 180-200 Kg.
So only a small amount of additional
scrap can be used over here.
Decline in Chinese steel demand
coupled with increasing protective
measures adopted by countries where
China has been dumping finished and
semi finished steel will force China to
open trade in steel scrap instead of
converting the same into finished steel
and trying to sell it.
But will market return to normalcy
soon, highly unlikely, as China on its
own accord has declared cutting down
on steel production capacities. This
means that its home and prompt scrap
production will come down at the same
time but this will be offset by the
higher amount of obsolete scrap
generation. As indicated earlier the
overall scrap generation will grow by
almost 4-5% annually reaching a figure
of 340 mnt in 2030. That's a huge
amount of scrap to be consumed by the
Chinese Iron and Steel industry.
How and when the global scrap
disruptions owing to Chinese scrap
inflow will be brought under control
will depend on China's willingness and
ability to shift to EAF route of
steelmaking in a big way. Though
Chinese government has time and again
180
225
285
340
2015 20 25 2030
p.a.
+5%
p.a.
+5%
p.a.
+4%
Chinese Steel Scrap Generation
Source: Mckinsey Report
Reports dated May 17th , stated “In
South Korea, mills were not
interested in US deep sea cargoes
after the recent emergence of
Chinese scrap exports, about four
weeks ago”. The buyers have
started demanding a price lower by
USD10-20 for the US deep sea bulk
heavy melting scrap I/II (80:20).
Though the steelmakers have
booked small shipments of scrap
from China as of now, speculations
are rife that they are initially
evaluating the scrap quality. Once
the quality is proven and found up
to the mark, Asian scrap buyers /
traders heading to China for their
supplies instead of conventional
suppliers, is a foregone conclusion.
Reports are that, Chinese scrap
availability, despite a 40% export
duty, has already impacted the
Asian scrap market, with Southeast
Asian mills holding off from
booking seaborne scrap.
In 2015 Asian countries imported
26.5 mnt of scrap. With almost 40
mnt of scrap becoming available
next door, that too at a cheap price,
will force the existing suppliers
either to look at new markets or
just simply drop the price and bear
the brunt. The chances of the latter
possibility are quite strong and may
subsequently not only lead to
reduced margins but may also result
in lot many traders exiting the
business.
How long with this scenario
continue?
Let's presume that China replaces
it's entire IF capacities with EAF
capacities, this will require
additional 66.67 mnt of EAF
capacities to be setup to consume
the 40 mnt of scrap unused by
Induction furnaces. Assuming a lead
time of 18 to 24 months to set up an
EAF unit (provided all the units are
setup simultaneously), we are looking
at a period of 24 months during which
the scrap trade will be disrupted and
disrupted badly. Primarily because the
companies collecting and trading scrap
would rather like to encash the scrap
by trading it rather than piling up their
scrap reservoir.
Moreover, the steel demand in China
has already touched its peak in 2014.
Despite some factors working to
increase demand, including urbanization
and development of Western China,
China's steel demand will continue to
fall modestly in the medium to long
term, mainly because of slow economic
growth-particularly stagnant growth of
steel-consuming industries, including
construction and manufacturing. At the
same point of time, the infrastructure in
China is entering into replacement
phase with huge quantities of obsolete
scrap getting generated each year. As
per a McKinsey report, China's scrap
supply is likely to grow at the rate of
4-5% per annum reaching a level of
340 mnt by 2030 up 160 mnt from
2015 levels.
S T O R Y
COVER
0
100
200
300
400
500
600
700
800
900
2005 2010 2015
Total Crude
Steel
Production
China
Fig 1
Crude Steel
Production
From Scrap
Source: World Steel Association

stated its intent to reduce BOF
capacities, but how much of this
plan will see the light of the day is
anybody's guess. China can just not
wish off its BOF capacities and
switch over to EAF as this may
warrant mass scale shifting of labour
from BOF facilities to other units,
which is easier said than done.
Secondly, this move if implemented
will also put strain on existing
power capacities. However, if
renewable power resources, which
are developing at a fast pace in
China (particularly the solar power
generation capacity), are diverted
towards residential and other uses,
the power generated through thermal
sources can very well be diverted for
increased consumption by EAF
driven power Iron and Steel sector.
How soon this can happen is the big
question to be answered. Thirdly, the
BOF manufacturers may look for
newer technologies so as to increase
their scrap intensities. How soon these
technologies can be developed and
implemented again begs an answer.
But till answers are found we are in
for a period, where the scrap prices
will be southward bound, China will
become a happy hunting ground for
scrap traders and the conventional
scrap yard owners will face a tough
time operating at the current price
levels. This disruption will last long
enough to alter the trade dynamics for
a prolonged period if not permanently
& establish Chinese scrap prices as the
new normal.
China's Historic & Projected Scrap Consumption
Other
Scrap Produced
at mills
Offcuts from
manufacturing
Autos
Power Generation
Urban Residential
Import
Obsolete
Home & Prompt
0
50
100
150
200
250
300
350
400
2005 2010 2015 2020 2025 2030
Source: Worldsteel; BMI McKinsey, SteelMint
SOURCES OF STEEL SCRAP
Steel scrap is generated
in three ways:
Home (or return)
scrap:
Prompt (or industrial)
scrap
Obsolete
(or postconsumer)
scrap:
Home scrap comes from waste
generated during the
steelmaking process due to
rolling, conditioning, cutting,
and trimming. As such, home
scrap's availability is directly
linked to steel production
volumes.
Prompt scrap is generated in
the downstream
manufacturing process,
prompt scrap rates tend to
track ﬁnished steel
consumption. Like home scrap,
prompt scrap is usually fully
recycled.
This form of scrap is
collected once products
containing steel reach the
end of their life. The historical
steel use by various sectors
and length of those products'
lifecycles determines the
volumes of available obsolete
scrap.
Other
Scrap Produced at mills
Offcuts from manufacturing
Autos
Power Generation
Urban Residential
China

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