AN OVERVIEW OF STEEL SECTOR

Global Scenario | Domestic Scenario | Production | Demand - Availability Projection | Steel

Prices | Imports | Exports | Levies on Iron & Steel | Opportunities for growth of Iron and
Steel in Private Sector
Global Scenario

In 2011 the world crude steel production reached 1518 million tonnes (mt) and showed a
growth of 6.2% over 2010. (Source: World Steel Association or WSA)

China remained the worlds largest crude steel producer in 2011 (684 mt) followed by
Japan (108 mt), the USA (86.4 mt) and India (72.2 mt; prov) at the 4th position (72.2 mt).

The WSA has projected that global apparent steel use will increase by 3.6% to 1422 Mt in
2012, following growth of 5.6% in 2011. In 2013, it is forecast that world steel demand
will grow further by 4.5% to around 1486 Mt. Chinas apparent steel use in 2012 and
2013 is expected to increase by 4% in both the years. For India, growth in apparent steel
use is expected to grow by 6.9% in 2012 and by 9.4% in 2013.

Per capita finished steel consumption in 2011 is estimated at 215 kg for world and 460 kg
for China.

Domestic Scenario

The Indian steel industry has entered into a new development stage from 2007-08, riding
high on the resurgent economy and rising demand for steel.

Rapid rise in production has resulted in India becoming the 4 th largest producer of crude
steel and the largest producer of sponge iron or DRI in the world.

As per the report of the Working Group on Steel for the 12 th Plan, there exist many
factors which carry the potential of raising the per capita steel consumption in the
country, currently estimated at 55 kg (provisional). These include among others, an
estimated infrastructure investment of nearly a trillion dollars, a projected growth of
manufacturing from current 8% to 11-12%, increase in urban population to 600 million
by 2030 from the current level of 400 million, emergence of the rural market for steel
currently consuming around 10 kg per annum buoyed by projects like Bharat Nirman,
Pradhan Mantri Gram Sadak Yojana, Rajiv Gandhi Awaas Yojana among others.

At the time of its release, the National Steel Policy 2005 had envisaged steel production
to reach 110 million tonnes by 2019-20. However, based on the assessment of the current
ongoing projects, both in greenfield and brownfield, the Working Group on Steel for the
12 th Plan has projected that the crude steel steel capacity in the county is likely to be 140

mt by 2016-17 and has the potential to reach 149 mt if all requirements are adequately
met.

The National Steel Policy 2005 is currently being reviewed keeping in mind the rapid
developments in the domestic steel industry (both on the supply and demand sides) as
well as the stable growth of the Indian economy since the release of the Policy in 2005.

Production

Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.

Today, India is the 4 th largest crude steel producer of steel in the world.

In 2011-12 (prov), production for sale of total finished steel (alloy + non alloy) was 73.42
mt.

Production for sale of Pig Iron in 2011-12 (prov), was 5.78 mt.

India is the largest producer of sponge iron in the world with the coal based route
accounting for 76% of total sponge iron production in the country (20.37 mt in 2011-12;
prov.):

Last five year's production for sale of pig iron, sponge iron and total finished steel (alloy
+ non-alloy) are given below:

Indian steel industry : Production for Sale (in million tonnes)

Category

2007-08 2008-09 2009-10 2010-11 2011-12*

Pig Iron

5.28

6.21

5.88

5.68

5.78

Sponge Iron

20.37

21.09

24.33

25.08

20.37

Total Finished Steel (alloy + non alloy)

56.07

57.16

60.62

68.62

73.42

Source: Joint Plant Committee; *provisional

Demand - Availability Projection

Demand Availability of iron and steel in the country is projected by Ministry of Steel in
its Five Yearly Plan documents.

Gaps in availability are met mostly through imports.

Interface with consumers by way of a Steel Consumers Council exists, which is

conducted on regular basis.

Interface helps in redressing availability problems, complaints related to quality.

Steel Prices

Price regulation of iron & steel was abolished on 16.1.1992. Since then steel prices are
determined by the interplay of market forces.

Domestic steel prices are influenced by trends in raw material prices, demand supply
conditions in the market, international price trends among others.

An Inter-Ministerial Group (IMG) is functioning in the Ministry of Steel, under the

Chairmanship of Secretary (Steel) to monitor and coordinate major steel investments in
the country.

The Government also took various fiscal and other measures for stabilizing steel prices
like significant reduction in import duties o n steel, major raw materials, including
mineral products and ores and concentrates in last few years. Also, excise duty for steel is
currently at 12%. The government has also imposed export duty of 30% on iron ore fines
and lumps in order to control ad-hoc exports of the mineral and conserve it for long term
requirement of the domestic steel industry.

For ensuring quality of steel several items have been brought under a quality control order issued
by the Government. The matter to bring more steel items under this order is under examination.
Imports

Iron & steel are freely importable as per the extant policy.

Last five years import of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Imports (in million tonnes)

Category

2007-08 2008-09 2009-10 2010-11 2011-12*

Total Finished Steel (alloy + non alloy)

7.03

5.84

7.38

6.66

6.83

Source: Joint Plant Committee; *provisional

Exports

Iron & steel are freely exportable.

Advance Licensing Scheme allows duty free import of raw materials for exports. Duty
Entitlement Pass Book Scheme (DEPB) was introduced to facilitate exports. Under this
scheme exporters on the basis of notified entitlement rates, are granted due credits which
would entitle them to import duty free goods. The DEPB benefit on export of various
categories of steel items scheme is currently applicable for steel exports.

Last five years export of total finished steel (alloy + non alloy) is given below:-

Indian steel industry : Exports (in million tonnes)

Category

2007-08 2008-09 2009-10 2010-11 2011-12*

Total Finished Steel (alloy + non alloy)

5.08

4.44

3.25

3.64

4.04

Source: Joint Plant Committee; *provisional

Levies on Iron & Steel

SDF levy

This was a levy started for funding modernisation, expansion and development of steel
sector. The Fund, inter-alia, supports :
1. Capital expenditure for modernisation, rehabilitation, diversification, renewal &
replacement of Integrated Steel Plants.
2. Research & Development
3. Rebates to SSI Corporations
4. Expenditure on ERU of JPC

The SDF levy was abolished on 21.4.94

Cabinet decided that corpus could be recycled for loans to Main Producers

Interest on loans to Main Producers is set aside for promotion of R&D on steel etc.

An Empowered Committee has been set up to guide the R&D effort in this sector.

EGEAF Was a levy started for reimbursing the price differential cost of inputs used for
engineering exporters. Fund was discontinued on 19.2.96.

Opportunities for growth of Iron and Steel in Private Sector

The New Industrial Policy Regime

The New Industrial policy opened up the Indian iron and steel industry for private investment by
(a) removing it from the list of industries reserved for public sector and (b) exempting it from
compulsory licensing. Imports of foreign technology as well as foreign direct investment are now
freely permitted up to certain limits under an automatic route. Ministry of Steel plays the role of
a facilitator, providing broad directions and assistance to new and existing steel plants, in the
liberalized scenario.
The Growth Profile
(i) Steel
The liberalization of industrial policy and other initiatives taken by the Government have given a
definite impetus for entry, participation and growth of the private sector in the steel industry.
While the existing units are being modernized/expanded, a large number of new steel plants have
also come up in different parts of the country based on modern, cost effective, state of-the-art
technologies. In the last few years, the rapid and stable growth of the demand side has also
prompted domestic entrepreneurs to set up fresh greenfield projects in different states of the
country.
Crude steel capacity was 89 mt in 2011-12 (prov) and India, the 4 th largest producer of crude
steel in the world, has to its credit, the capability to produce a variety of grades and that too, of
international quality standards. The country is expected to become the 2 nd largest producer of
crude steel in the world by 2015-16, provided all requirements for creation of fresh capacity are
adequately met.
(ii) Pig Iron
India is also an important producer of pig iron. Post-liberalization, with setting up several units
in the private sector, not only imports have drastically reduced but also India has turned out to be
a net exporter of pig iron. The private sector accounted for 91% of total production for sale of pig
iron in the country in 2011-12 (provisional). The production of pig iron has increased from 1.6
mt in 1991-92 to 5.78 mt in 2011-12 (provisional).
(iii) Sponge Iron
India is the worlds largest producer of sponge iron with a host of coal based units, located in the
mineral-rich states of the country. Over the years, the coal based route has emerged as a key
contributor and accounted for 76% of total sponge iron production in the country (20.37 mt in
2011-12; prov.). Capacity in sponge iron making too has increased over the years and stands at
around 35 mt.

HISTORY

The Beginning
The modern iron and steel industry in India owes its origin to the grand vision and perseverance
of Jamsetji Nusserwanji Tata. The Tata Iron and Steel Company Limited (Tata Steel) was
registered in Bombay on 26th August 1907. The construction of the steel plant was then taken up
in earnest with the first stake being driven in February 1908. R.G. Wells, an American with steel
plant construction experience took over as the General Manager in 1909. Success came when the
first blast furnace was blown-in on 2nd December 1911, and the first ingot rolled on 16th
February 1912.
The company was originally constructed for a capacity of 160,000 tonnes of pig iron, 100,000
tones of ingot steel, 70,000 tones of rails, beams and shapes, and 20,000 tonnes of bars, hoops
and rods. The plant essentially consisted of a battery of 180 non-recovery coke ovens and 30 byproduct ovens with a sulphuric acid plant, two blast furnaces (each of 350 tonnes per day
capacity), one 300 tonne hot metal mixer, four open hearth furnaces of 50 tonne capacity each,
one steam engine driven 40-inch reversing blooming mill, one 28-inch reversing combination
rail and structural mill with re-heating furnaces, and one 16- inch and two 10-inch rolling mills.
Besides, the steel works had a power house, auxiliary facilities and a well-equipped laboratory.
The cost of the plant as erected came to around Rs.23 million.

The War Years

Soon after the outbreak of the First World War in 1914, the plant was geared to meet the priority
needs of the government. It worked on a 24 hour schedule, and sold its product to the
government at a fraction of the price prevailing in the open market. Two more open hearth
furnaces of 60 tonnes capacity each were added to make more steel. Tatas supplied 1500 miles of
rails and 300,000 tonnes of steel to the allies war effort. During this period, Tata steel embarked
on an expansion of the works. The greater extension programme was taken up in 1917 to raise
the steel production to 500,000 tonnes. This phase saw the then latest Duplex process of
steelmaking being introduced along with an electric driven blooming mill.
The programme was delayed due to the war and could be completed only in 1924. As against the
original estimate of Rs.67.6 million, the final cost came to Rs. 196 million.
The company progressively added new units such as the third Duplex furnace in 1929, two new
roughing and finishing mills in 1933, and a new blast furnace along with coke ovens in 1935.
Simultaneously, mining leases were renewed or obtained afresh and attention was given to
ancillaries and, a capacity of 800,000 tonnes of saleable Steel was attained by 1939. At that time,
Tata Steel came to be regarded as the largest Steel plant in the British Empire and also the
cheapest exporter of pig iron in the world (the latter reminiscent of the state in 1999).
During the years of the Second World War between 1939 and 1945, Tata Steel contributed in a
big way towards supplying war materials. This was a result of successful experimentation and
innovation with existing resources. At the instance of the Government, in 1941, Tata Steel put up
a wheel, tyre and axle plant to meet the requirements of the railways; in 1942 a mill to

manufacture 1,000 tonnes per month of armour plates for defence carriers was added; a benzol
recovery plant for producing toluene needed for the manufacture of explosives was put up in
1943; special quality sheets of alloy Steel and of high silicon were made in 1944-45 along with
Steel for the famous Tatanagar tanks.
Subsequently, Tata Steel was looking for new areas of diversification and for modernizing the
works.
Expansion to Two Million Tonnes

The Steel target of six million tonnes of ingot Steel per annum in India set for the second five
year plan included expansion of the existing Steel plants. Tata Steel was permitted to go in for an
expansion to two million tonnes of ingot Steel per annum. Tata Steels expansion programme, the
largest project in the private sector, was started in 1955 and completed by December 1958.
The rated daily capacity of the five blast furnaces in existence prior to TMP was 4200 tonnes.
Blast furnace F, with a rated capacity of 1650 tonnes per day, provided sufficient hot metal for
the two million tonne programme.
By providing sintered ore, blast furnace production increased by 10% to an annual output of
1,870,000 tonnes. Blast furnace F was completed and put in operation on October 10, 1958. One
of the largest and most modern furnaces in the world, it was designed for high top-pressure
operation and the use of sinter in the burden. The blowing-in ceremony of blast furnace F was
regarded as the official christening of TMP.
A huge Steel Melting shop no. 3 (closed down in 1999) comprising two 800 tonne hot metal
mixers, three 32 tonne Bessemer converters and seven 200 tonne open-hearth furnaces (with the
possibility of adding an eighth furnace) was the corner stone of steelmaking under TMP.
A new rolling mill complex was constructed consisting of soaking pits, Blooming Mill no.2 and
a sheet Bar and Billet mill (this was closed in early 1999). Between the two mills, the primary
capacity was nearly three million tones of ingots per annum. The continuous sheet bar and billet
mill no.2 was the main mill for semi-finished products for feeding the sheet mills, tin bars for the
tinplate company and gothics for the manufacture of seamless tubes.
The Medium and Light Structural mill, which was also installed along with the other mills, was
capable of rolling diversified products in wide ranges and was designed to roll 350,000 tonnes of
blooms per annum. The products manufactured were to be mainly beams, channels, angles,
junior beams and parallel flange beams-the last two for the first time in country. The revamping
of the rail and structural mill (closed down in 1989), sheet bar and billet mill no.1 (closed down
in 1998) and the merchant mill were also undertaken. A new merchant mill no.2 was
commissioned in 1962. The additional service facilities included water supply arrangement,
power supply and distribution to meet the total maximum demand of 125,000 kW and railway

track facilities. The two million tonne programme was completed on schedule and involved no
major delay.

Period between 1960-80

During the decade of the sixties, consideration was given to the expansion of Tata Steel in the
private sector. In July 1961, Tata Steel obtained an industrial license for setting up alloy steel
Sinter plant: A new 1.37 mtpa sinter plant (SP2) to raise the total sinter production to 2.5 mtpa
and thereby, increase sinter in blast furnaces to around 65%.
Coke ovens: A coke oven battery with 54 ovens using stamp charging technology to make coke
of internationally acceptable quality was established. Stamp charging has given following
advantages:

Superior coke strength after reaction (CSR) compared with top charged coke, as well as
higher bulk density.

Higher yield of sized coke for the blast furnaces.

Improved blast furnace productivity because of usage of coke with better room
temperature and high temperature properties.

Waste recovery: 1 Mtpa Waste recycling plant to recover metallics from the plant was
established
Ancillary technologies: The main technology improvement in phase II was the introduction of
coal injection in blast furnaces. The limited reserves of coking coal in India have always spurred
Indian iron makers to strive for lower coke rates. Tata Steel commissioned a coal injection unit in
1991 for its F blast furnace. The system developed by Kloeckner Sstahl Technik (KST) was
adopted on the success of coal injection in F blast furnace; the technology was extended to G
blast furnace as a part of modernisation phase III and thereafter, also incorporated in D blast
furnace.
Modernization phase III
The success of modernization phases I and II and the need to enter the flat product market,
provided the necessary impetus to embark on the crucial third phase of modernization. Keeping
in view the international and domestic Steel scenario, it was felt necessary for Tata Steel to set up
an internationally competitive flat products complex. Apart from a one million tonne hot strip
mill, a new one million tonne G blast furnace was also installed. The landmarks during this phase
were:

Ironmaking: To augment steelmaking capacity, a corresponding increase in hot metal production

was necessary. Hence, a highly automated blast furnace of 1 mtpa capacity, called the G blast
furnace, was commissioned in November 1992.
Steelmaking: A new LD shop 2 with two 130t capacity LD vessels, with one out of two
operating at any given moment, was commissioned.

New Cold Rolling Mill at Tata Steel

In addition to modernization, Tata Steel has defined its vision for the next millennium and has
embarked on an unprecedented expansion in flat products. As a first step, taking into account the
doubling of the capacity of the HSM, a 1.2 million tonnes cold rolling complex has been
commissioned in Jamshedpur towards the middle of the year 2000. Some of the salient features
of this new development are highlighted.

Facilities in the cold rolling complex

Internationally, the technology of cold rolling has developed to an extremely sophisticated level.
This progress has been augmented by the work on technology by equipment suppliers around the
world, focused on further improving the processes to produce better products, thereby propelling
cold rolled strips to higher levels of quality and cost competitiveness.
The major facilities include a pickling-cum-tandem cold rolling mill, an annealing facility, and
galvanizing lines.

Steelmaking and casting

Major developments in the steelmaking and casting area
includes the following:

Switchover from duplex and open hearth steelmaking to the oxygen process.

Adopting optimum KD vessel configuration (to accommodate the high slag volume as a
result of high silicon and phosphorus in hot metal) and use of bottom inert gas agitation.

Strategy to make low phosphorus Steel.

Improvement of vessel lining life from 160-180 heats to over

1000 heats

Adoption of continuous casting through billet and slab casters.

Tata Steel Today

As a result of innovations and technological upgradation, Tata Steel, has become a well-run ultra
modern plant - one of the best in the world. Fundamental changes in some metallurgical
parameters have brought about this remarkable transformation. Necessity became the mother of
invention and numerous innovations invoked improvement. The metallurgical changes
introduced were essentially centered around:

Reducing alumina level in sinter from 4.4 to 2.5 %.

Improving in coke quality

Making changes in the fluxes used in sintermaking essentially to decrease the alkali
input.

Adopting the optimum LD vessel configuration and blowing conditions to accommodate

the high slag volume required to deal with high silicon and phosphorus in Indian hot
metal.

Increasing the yield during LD steelmaking

Introducing continuous casting (CC) instead of ingot casting to increase the net yield.

All these factors have made Tata Steel internationally cost competitive. In terms of hot metal
costs, Tata Steel is amongst the lowest in the world and has a clear advantage over other major
integrated producers. The cost of conversion from hot metal to a finished product such as hot
rolled coils where Tata Steel has not been very competitive so far would be taken care of in the
near future as investments already made to achieve the results foreseen. High ash in coke, poor
room temperature and high temperature strengths of coke, high alumina in the iron oxide feed,
high silicon in hot metal, low yields during steelmaking, low yield of finished products, high
energy consumption, high manpower, etc. have been the weaknesses not only of Tata Steel but of
the Indian Steel industry as a whole.
Appropriate steps taken by the Company have already resulted in better yield lower energy
consumption, lower silicon in hot metal, lower silicon in hot metal, lower lime consumption in
steelmaking, higher vessel life, etc., all of which augur well for the Steel Company in future.

Tata Steel in The New Millennium

Tata Steel is all set to establish itself as the supplier of choice by delighting all its customers with
its products and services. The Organisation is envisaged to become the most cost competitive
Steel plant to serve the community and the nation. Where Tata Steel would venture, others will

follow. The 21st century will certainly see a new Tata Steel - an integrated Steel plant in India
with truly world class facilities along with a will to win amongst a committed and streamlined
workforce.

Iron and steel industry

INTRODUCTION:Iron and Steel Industry in India is on anupswing because of the strong
global anddomestic demand. Indias rapid economicgrowth and soaring demand by sectors
likeinfrastructure, real estate and automobiles,at home and abroad, has put Indian steelindustry
on the global map. According to thelatest report by International Iron and SteelInstitute (IISI),
India is the 4th largeststeel producer in the world.
HISTORY OF IRON AND STEEL INDUSTRY ININDIAIron and Steel industry in the
country has experienced asustainable growth since the independence of the country.A humble
beginning of the modern steel industry wasreached in India at Kulti in West Bengal in the year
1870.But the outset of bigger production became noticeable withthe establishment of a steel
plant. It started plant inJamshedpur in Bihar in 1907. it started production in 1912.The new
township was named after Jamshed ji Tata.It was, however, only after Independence that the
steelindustry was able to find a strong foothold in the country.Excluding the Jamshedpur plant of
the Tatas, all are in thepublic sector and looked after by Steel Authority of India Ltd.(SAIL).
SOME OTHER INDUSTRIES:Bhilai and Bokaro Steel plant were set up withSoviet
alliance. Durgapur and Rourkela came upwith British and West German technicalexpertise,
respectively.
THE PRESENT SCENARIO OF THE INDUSTRYIndia has one of the richest reserves of all
the raw materialsrequired for the industry, namely land, capital, cheaplabour, iron ore, power,
coal etc. Yet we are 4th in the worldranking for production of steel. We produced 66.8
milliontonnes in 2010-11, while China, at the top of thelist, produced 626.7 million tonnes. Our
per capitaconsumption of steel in India (at 50 kg per annum) is wellbelow the world average (at
about 200 kg per annum) andmuch below that of the developed world (around 350 kg
perannum).
VISION 2020 OF THE STEEL INDUSTRY IN INDIAThe National Steel Policy 2005 aims
at increasing thetotal steel production of the country to 110 million tonnesper year (in 2019-20)
from 38 million tonnes (in 2004-05).This was supposed to require a compounded annualgrowth
of about 7.3%. The total production in 2010 was66.8 million tonnes. The compounded annual
growth from2005 to 2010 has been more than 9% which is better thanthe expected growth. But
most of these are a result of thebrownfield expansion projects of the existing steelcompanies. But
to continue with the same growth rate, weneed new Greenfield projects.
INDIAS EXPORT OF IRON AND STEEL
IMPORTS:Iron & steel are freely importable as per the extant policy.Last five years import
of total finished steel (alloy + non alloy) is given below:-Indian steel industry : Imports (in
million tonnes)Category 2007-08 2008-09 2009-10 2010-11 2011-12*Total Finished Steel (alloy
+ non alloy) 7.03 5.84 7.38 6.66 6.83Source: Joint Plant Committee; *provisional

 TATA STEELTata Steel is a top ten global steelmaker and the worlds secondmost
geographically diversifiedsteel producer.Tata Steel was founded in India in1907. Since 2004 the
Companyhas expanded globally, acquiringAsian steel producers NatSteeland Millennium Steel
(now calledTata Steel Thailand) as well asEuropes second largest steelproducer Corus (now
called TataSteel Europe Limited).
Tata Steel is part of the Tata Group, Indias largestindustrial conglomerate. Both Tata and
Tata Steelhave a long history of charitable donations andsocial responsibility, with Tata
spendingapproximately 4% of the Companys profit aftertax on corporate social responsibility
initiatives.Tata Steel endeavors to improve the quality of life inthe communities in which the
Companyoperates. Tata Steels charitable projects havetouched the lives of over 800,000 people
in India.
Tata Steel is the worlds 6th FACTS ABOUT TATA STEEL An existing annual crude steel
capacity of 28 largest steel company. Indias largest Asias first integrated steel plant
and million tons. integrated private sector steel company isnow the worlds second most Tata
Steel plans to grow and geographically diversifiedsteel producer. Its 5 million tonnes
per globalise through organicandinorganic routes. annum (MTPA) JamshedpurWorks plans to
double its capacity by 2010.
INDUSTRY STRUCTUREThe Iron and steel Industry in Secondary Integrated
producersIndia has 2separatedivisions: producersIntegrated Producers: Amongst the
Integratedproducers, themajor producers include Tata Iron and Steel Company Limited(TISCO),
Rashtriya Ispat Nigam Limited (RINL) and SteelAuthority of India Limited (SAIL), who
generate steel byconverting iron ore.Secondary Producers: The Secondary producers like
IspatIndustries, Lloyds steel and Essar Steel, create steel throughthe process of melting scrap
iron. These are mainly small steelplantsand produce steel in electric furnaces, using scrap and
sponge
During II WORLD WAR IMPACT ON STEEL INDUSTRIES sharply because of
steels World War II, industry productionincreased importance to warmobilization.Some of this
increase was a result India ofproduction returning to full capacity afterthe depression.
Meanwhile, pushed forward for making Iron and SteelforJapanese Army. the United States
controlled 60
THE PROBLEMS FACED BY THE INDUSTRY IN PRESENT TIMESMany steel giants
signed for opining new industries withseveral state governments (especiallyJharkhand, Orissa,
Chattishgarh and West Bengal) for newprojects but none of them have materialised. It has taken
5long years for Tata Steels Kalinganagar (Orissa) project tocomplete the rehabilitation and
resettlement process. JSWsproposed Salboni plant (W.B) hasnt been allotted the
requiredamount of land, and moreover the government, recently, tookcontrol over about 400
acres of land bought by the companybecause of a state rule that any outsider cant buy more
than24 acres of village land. POSCO is facing massive resistancefrom the natives of
Jagatsinghpur (Orissa) for land acquisitionwhile many other steel plants are awaiting aid from
thegovernment in terms of either land or infrastructure.
Mining is thePROCESSING OF IRON AND STEELMINING Earth is excavated
deepfirst step in the production of iron and steel. Breaking and cutting of iron ore takes place
toin search of iron ore. receive rawiron.Raw Materials from the iron ore are put in a
particularly hotfire lead in the embers of the fire.This is done to get the mixture of Iron Ore and
Charcoal thatis burnt with the help of a blast of air from hand workedbellows.

 Conclusion :We develop economic as well as engineering indicators for productivitygrowth,

technical change and energy consumption that allow us toinvestigate savings potentials in
specific energy use as well as carbondioxide emissions. We discuss our findings within a broader
context ofstructural and policy changes in the sector. The economic analysis showsthat
productivity has been decreasing over time. The decline in productivitywas caused largely by
government protection regarding prices anddistribution of steel and by inefficiencies in
integrated steel plants that werereserved to the public sector. With liberalization of the iron and
steelindustry productivity increasedsubstantially to positive growth rates.We further introduce
cost effective and low cost potentials for reducingenergy consumption as well as carbon
emissions. In comparing Indianenergy consumption to best practice energy consumption we
show thatenergy savings of about 50% could be achieved. However, theimplementation of
initiatives towards energy efficiency is being hampered bybarriers both of general and process
specific nature occurring at the macroand micro level of the economy.

Steel Industry in India

Latest update: July, 2014
Value of Indias metals and mining industry

Indias metals and mining industry recorded a strong 19.8 per cent expansion in 2011 to touch
US$ 141.9 billion.

Contribution in global crude steel production

India is the worlds fourth-largest producer of crude steel (2012), with a global share of 5.1 per
cent.

Market value of the Indian steel sector

In 2011, the Indian steel sectors total market value was US$ 57.8 billion.

Sector-wise steel consumption in India

Infrastructure is Indias largest steel consumer, accounting for 63 per cent of total consumption in
FY11.

JULY 2014
Introduction

Steel is crucial to the development of any modern economy and is considered to be one of the
backbones of human civilization. The level of per capita consumption of steel is treated as an
important index of the level of socio-economic development in a country.
From only three steel plants, a few electric arc furnace-based plants and a mere one million tonne
(MT) capacity status at the time of Independence, India is now the fourth largest crude steel
producer in the world and the largest producer of sponge iron.
Presently, steel contributes to nearly two per cent of the gross domestic product (GDP) and
employs over 500,000 people. The total market value of the Indian steel sector stood at US$ 57.8
billion in 2011 and is expected to touch US$ 95.3 billion by 2016. India's per capita steel
consumption stood at 57.8 kilograms in 2013, according to a World Steel Association report and
is expected to rise with increased industrialisation throughout the country.
Market size

India is slated to become the second-largest steel producer in the world by 2015. Steel production
in the country has increased at a compound annual growth rate (CAGR) of 6.9 per cent over
2008-2012.
India's real consumption of total finished steel grew by 0.6 per cent year-on-year in April-March
2013-14 to 73.93 MT, according to the Joint Plant Committee (JPC), Ministry of Steel.
Increasing demand by sectors such as infrastructure, real estate and automobiles at home and
abroad has put India on the world map. The construction sector accounts for around 60 per cent
of the country's total steel demand while the automobile industry accounts for 15 per cent.
Investments

The steel industry and its related metallurgy and mining industries have witnessed quite a few
investments and developments in the recent past. Some of the notable investments are as follows:

L&T Special Steels and Heavy Forgings have entered into a five-year
technology transfer agreement with Japan Steel Works. This agreement
covers transfer of critical technology for steel-melting and heavy forgings
made from ingots weighing up to 200 tonnes and for the hydrocarbon and
thermal power sectors.

JSPL Group has commissioned a greenfield 2 MT steel plant in Sohar, Oman at

an investment of US$ 800 million. The greenfield unit will be one of the
largest steel plants in the Gulf region.

Steel Authority of India Ltd (SAIL) has secured contracts for supplying over
117,000 tonnes of rails after successful bids for two global tenders floated by
Rail Vikas Nigam Ltd (RVNL), for major upcoming passenger rail line projects
in India.

JSW Steel plans to commissiona Rs 4,500 crore (US$ 748.55 million) cold
rolling mill (CRM) at its integrated steel plant in Torangal, Karnataka. The unit,
which will produce high-strength auto-grade steel, has an installed capacity
of 2.3 million tonnes per annum (MTPA).

JSW Steel is also set to acquire WelspunMaxsteel for about Rs 1,100 crore (US$ 182.98 million)
in a move aimed at sourcing cheaper raw material, bringing down production cost and enhancing
its presence in the northern and western markets.

Canada has invited Coal India Ltd (CIL) to explore mining opportunities in
British Columbia, as per Mr Stewart Beck, Canadian High Commissioner in
India.

Government Initiatives

Ministry of Steel, Government of India, is considering setting up a strong research and

development (R&D) mission/centre, virtual or otherwise, to step up innovative research and
technology development in the country's steel industry.
The Centre's Steel Development Fund (SDF) and Plan Scheme presently provide financial
assistance for R&D in the sector. Under the SDF scheme, 82 R&D projects have been approved
with total project cost of Rs 677 crore (US$ 112.61 million) where in SDF assistance is Rs 370
crore (US$ 61.54 million). Under the Plan Scheme, eight projects have been approved with a
total cost of Rs 123.27 crore (US$ 20.51 million) where in government assistance is Rs 87.28
crore (US$ 14.51 million).
In order to increase industrial activity, the Government of India, through the Ministry of Steel,
has signed Memorandums of Understanding (MoUs) with all the major steel producing Public
Sector Undertaking (PSU) companies such as SAIL and Rashtriya Ispat Nigam Ltd (RINL).
These will help to direct the companies to achieve targets and benefit the sector as a whole.
Road Ahead

The liberalisation of the industrial policy and other initiatives taken by the government have
spurred the growth of the private sector in the steel industry. While the existing units are being
modernised or expanded, a large number of new steel plants have also come up in different parts
of the country based on cost-effective and state of-the-art technologies. In the last few years, the
rapid and stable growth of the demand side has also prompted domestic entrepreneurs to set up
fresh greenfield projects in different states of India.

With the increase in global population, there is a greater need for steel to build public-transport
infrastructure. Emerging economies will continue to drive demand as these countries require a
significant amount of steel for urbanisation and industrialisation purposes. India's steel sector is
anticipated to witness investment of about Rs 2 trillion (US$ 33.26 billion) in the coming years,
as per Tata Steel.
Exchange Rate: INR 1 = US$ 0.0166 as on July25, 2014
References: Media reports, Press Releases, Press Information Bureau, Department of Industry
Policy and Promotion, Ministry of Steel, Confederation of Indian Industries

FUTURE
India is slated to become the second-largest steel producer in the world by 2015. Steel production
in India has increased at a compound annual growth rate (CAGR) of 6.9 per cent over 200812.
Easy availability of low-cost manpower and presence of abundant reserves make India
competitive in the global setup.
The total market value of the Indian steel sector stood at US$ 57.8 billion in 2011 and is
anticipated to touch US$ 95.3 billion by 2016. Attracted by the growth potential of the Indian
steel industry, several global steel players have been planning to enter the market. Intended steel
capacity build-up in India is set to result in investments in the range of US$ 104.2 billion to US$
208.3 billion by 2020.
In view of the sectors changed dynamics, globally as well as domestically, the Ministry of Steel
has initiated the process of drafting a new National Steel Policy to replace the existing Policy of
2005. The Government of India is encouraging private ownership for steel operations and has
therefore allowed 100 per cent foreign direct investment (FDI) through the automatic route in the
Indian steel sector.
Driven by rising infrastructure development and increasing capacity addition in the automotive
industry, demand for steel is expected to be robust. The estimated steel consumption in airport
building is also likely to grow more than 20 per cent over the next few years with more and more
modern and private airports expected to be set up.