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1.
Index:
1. Steel Industry in India: Global Perspective - Indian steel industry vs. global steel industry - Contribution of Indias economy to global GDP - India & the leading steel producers in the world - Indias share in global steel consumption - Competitiveness of the Indian steel industry 2. Steel Production Scenario in India: The Way Forward - Indian steel industry: evolution and growth - Steel production trend in India - Leading steel producers in India - Technology wise steel production - Category wise steel production
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3. Indias Steel Consumption Trend and the Growth Drivers - Indias steel consumption on high growth trajectory - Steel consumption trend in India - Category wise steel consumption - Prime growth drivers of steel demand in India
4. Indias Steel Import Export Scenario and Future Prospects - Steel import trend and future scenario - Steel export trend and future scenario 5. Raw Material Supplies for Steel Industry: Is India Self Sufficient? - Assessing raw material supply scenario for India - Raw material demand by steel industry - Initiatives that will improve & secure raw materials supply
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Note
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Disclaimer
This report is for personal reference only, to increase knowledge and awareness about the steel industry. Information provided in this report are sourced from standard sources however Corpotrade Global does not guarantee exactness and accuracy of the information sourced. Corpotrade Global will not be responsible for any losses claimed in relation to contents or material of this report. A detailed research and expert assistance is advised for conclusions and decision making.
Right Reserved | CORPOTRADE GLOBAL
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Index:
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6. Inadequate Infrastructure: A Major Concern for Steel Industry in India 12 - Infrastructure issues for steel industry in India - Infrastructure addition during twelfth five year plans (2012-17) - Actions to boost infrastructure support to steel industry 7. Indian Steel Industry and Increasing Role of Technology - Technological exposure of Indian steel industry - Indian steel industry needs to adapt latest technologies 8. Prospective Analysis of Indian Steel Industry - Potential Growth Drivers of Indian Steel Industry - Strength, Weakness, Opportunity & Threat: SWOT Analysis 9. Executive Summary 13
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Note
For More Information, Consultancy Or Advisory Services Contact Us
Disclaimer
This report is for personal reference only, to increase knowledge and awareness about the steel industry. Information provided in this report are sourced from standard sources however Corpotrade Global does not guarantee exactness and accuracy of the information sourced. Corpotrade Global will not be responsible for any losses claimed in relation to contents or material of this report. A detailed research and expert assistance is advised for conclusions and decision making.
Right Reserved | CORPOTRADE GLOBAL
3.
Exhibit 1: World crude steel production: 2007-11, country-wise contribution (%) to world crude steel production in 2011
World Crude Steel Production in MT (2007-11)
1800 1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011
Share in % (2011)
RoW, 11.8 Brazil, 2.3 Ukraine, 2.3 South Korea, 4.5 Russia, 4.5 India, 4.7 United States, 5.6 Japan, 7 China, 45.5
Indias is gradually evolving as global leader in steel production though it lags in per capita steel consumption
Global Rank
US 15.1
CHINA 11.3
INDIA 4.5
JAPAN 4.4
Source: International Monetary Fund, Economic Times Right Reserved | CORPOTRADE GLOBAL
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Exhibit 3: Top ten crude steel producers in the world and their steel production in: 2010 and 2011 (MT)
Country 2011 2010 China 695.5 638.7 Japan 107.6 109.6 United States 86.2 80.5 India 72.2 68.3 Russia 68.7 66.9 South Germany Ukraine Korea 68.5 58.9 44.3 43.8 35.3 33.4 Brazil 35.2 32.9 Turkey 34.1 29.1
Exhibit 4: World crude steel consumption: 2007-11, country-wise contribution (%) to world crude steel consumption in 2011
World Crude Steel Consumption in MT ( 2007-11)
1500 1000 500 0 2007 2008 2009 2010 2011
Other Asian, 7.2 Others, 6.3 Japan, 7.1 EU, 11.7 India, 4.9 CIS, 7.4 NAFTA, 7.7
OTHERS Africa: 1% Middle East: 1.5% Central & South America: 3.3% Australia & New Zealand: 0.5%
Share in % (2011)
Other Europe, 2.6 China, 45.1
Potential growth of steel consumption in India will polarise development of global steel sector towards India
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During the period FY 07 to FY 12 crude steel production has attained growth at CAGR of about 7.7 %. While the average capacity utilisation remained near 89 percent of the total production capacity. During the twelfth five year plan crude steel production is estimated to grow at CAGR of about 11.3 % due to large scale capacity addition plans for steel production during this period.
Exhibit 6: Indias crude steel production trend & projection- FY 2007 to FY 2017
Capacity utilisation of the Indian steel industry on average remains high at 89%, however the sector suffers due to low efficiency
150 100 50 0
FY 07 FY 08
FY 09
FY 10
FY 11
FY 12
FY 13
FY 14
FY 15
FY 16
FY 17
Source: Ministry of Steel-GoI: working group report 2012-17, Annual Report-2011: MoS-GoI Right Reserved | CORPOTRADE GLOBAL
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Share in % (2011)
Steel production share- FY 2011: Crude Steel Private Sector: 75% Gov. Sector: 25% Finished Steel Private Sector: 80% Gov. Sector: 20%
Others-1: Includes production from EAF Units/ COREX-BOF Others-2: Includes production from induction furnace Source: Joint Plant Committee: MoS-GoI working group report 2012-17
Steel production in India which was primarily reserved for government companies till liberalisation now sees dominance of private companies in terms of production share. Share of private sector companies in crude steel production raised from 49 % in FY 01 to 75 % in FY 11. While the share of private sector companies in finished steel production increased from 68 % in FY 01 to 80 % in FY 11. Exhibit 8: Share of private sector companies in steel production in India (%): FY 2011
Post deregulation of steel industry private sector is gaining dominance in terms of cumulative production share
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Total 100 %
FY 06
Total 100 %
FY 08
5.28 20.37 56.08
FY 09
6.21 21.09 57.16
FY 10
5.88 24.33 60.62
FY 11
5.68 25.08 68.62
FY 12(P)
5.78 20.37 73.42
Exhibit 11: Product-wise crude steel production for sale (MT): FY 2007 to FY 2011
With increasing number of small steel producers steel production through electric furnaces route is growing substantially
80 60 40 20 0 FY 07 FY 08 FY 09 FY 10 FY 11 (P) Source: Joint Plant Committee: MoS-GoI: working group report 2012-17 Right Reserved | CORPOTRADE GLOBAL Total of Alloy Products Total of Flat Products Total of Long Products
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Exhibit 12: Per capita steel consumption in India (kg): 2006 to 2011
Indias Per Capita Steel Consumption vs. World Average
250 200 150 100 50 0 2006 2007 2008 2009 2010 2011 Source: World Steel Association India World Average
Steel consumption growth in India during 11th FYP has outpaced domestic steel production growth with a differential of 3% in CAGR
Source: WSA, Joint Plant Committee: MoS-GoI: working group report 2012-17, *Estimates Right Reserved | CORPOTRADE GLOBAL
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Indias steel sector growth is primarily driven by domestic demand as export volume is low
Factors contributing to steel demand growth in India - Economic growth - Construction - Infrastructure dev. - Population growth - Manufacturing
Major Factors for Steel Demand Growth Economic growth Industrial, construction & manufacturing growth Growth in population Rising middle class population and per capita steel consumption Growth in rural steel consumption Infrastructure Development
Construction, infrastructure development and manufacturing activity forms the backbone of steel industry demand
Manufacturing Sector Energy & other Sector Agriculture, Mining sector activity
High
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Indias steel export will shift towards higher percentage of value added and high margin steel products in the export basket
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Exhibit 18: Raw material demand (MT) by steel industry during 12th FYP: 2012-17
Estimated Demand
FY 12 FY 13 FY 14 FY 15 FY 16 FY 17
Iron Ore
115.03 135.7 149.43 166.66 185.24 206.18
Coking Coal
43.25 52.29 57.91 67.49 77.23 90.16
Others
11.13 13.92 15.33 17.28 19.48 21.76
Total
169.41 201.91 222.67 251.43 281.95 318.1
Others : PCI Coal, Manganese Ore, Chromite, Ferro Chrome, Ferro-Manganese, Silico-Manganese, Ferro-Silicon and Refractories
Source: Working group report 2012-17- MoS, Projections by working group on steel industry
India lags in coking coal reserves, acquiring coal assets overseas can assure reliable & economic supplies of coal in the future
Reformation Measures 1. Limiting volatility in prices & assuring continuous supply through long term linkages 2. Assuring raw material supply security through overseas assets acquisitions 3. Consolidating steel industry and focus on backward integration 4. Adapting new technology to increase output and maximise efficiency 5. Allotting iron ore and coal mines for captive consumption by steel plants 6. Minimising duties & taxes on imports & increasing same for exports of raw material 7. Adding coal washing and iron ore sintering & pelletisation facility Source: Indicative model
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Inadequate
- Handling facility - Road network - Rail network
Inadequate
- Loading/unloading Facility
Inadequate
- Storage & Logistics
MARKET
Lack of dedicated
- Road network - Rail network PORT
Congested
MINES - Road network - Rail network
Infrastructure development will drive steel demand as well as support infrastructural requirement by steel industry itself
400 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17
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Use of latest technology by Indian steel industry remains low so there is huge potential for improvement through introducing latest technology
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There is a huge potential growth opportunity for Indian steel industry with untapped rural markets and growing economy
THREAT Delays in approvals and regulatory clearances Land acquisition and rehabilitation issues Competition from large number of small steel producers Threat from cheap import and dumping Issues of capital for projects and high interest on loans
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For more information, consultancy or advisory services feel free to contact me through: Phone: +91 11 6469 7575 Mail: tarun@cptgl.com business@cptgl.com Web: www.cptgl.com www.corpotradeglobal.com
Though effect of global economic recession post 2008 was witnessed by steel sector globally, but Indian steel industry showed resilience and growth due to robust domestic demand. The credit of Indian steel industrys growth goes to policies of government and Indian public and private sector steel producers. With present low per capita steel consumption at 57 kg in India against global average of 215 kg there lies a huge potential for steel demand growth in India. Also the estimated massive $ 1 trillion investment in Indias infrastructure sector during 12th FYP will boost demand of steel. Significant steel demand will also arise from rural markets and proactive steel producers in India have started exploring untapped rural markets to get maximum share of this market. Indian steel industry attained appreciable growth post liberalisation but it has suffered due to issues of efficiency, quality, safety and productivity. Future growth and sustainability of Indian steel industry lies in adapting latest technologies, improving efficiency and optimising process.
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BIBLIOGRAPHY
World Steel Association, International Monetary Fund, Economic Times, Ministry of Steel - India, Public Information Bureau - India, Joint Plant Committee- India, Planning Commission - committee on Infrastructure, Annual report 2010-11- MoS, World Steel in Figures 2012-WSA, Press Information Bureau- GoI, moneycontrol.com, The Telegraph, The Economic Times, miningweekly.com, Wikipedia, mjunction and CorpotradeGlobal Research & Database.
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