Description
indan steel industry, steel sector trends, growth scenarios, swot analysis of steel sector, globalization and steel sector and government policies around steel sector.
? ? ? ? ? ? ? ? ? ?
Introduction Indian Steel Industry Steel Sector Trends Growth Scenarios Top 10 Players SWOT Analysis Government Policies Globalization And Steel Sector Recommendations References
? Steel is crucial to the development of any
modern economy and is considered to be the backbone of human civilisation.
? It is a product of a large and technologically
complex industry having strong forward and backward linkages in terms of material flows and income generation.
3
World Steel Industry – Top Ten
7
Germany 45.8 mT Russia 68.5 mT
4
8
Ukraine 38.6 mT
1
China 502 mT
10
Japan
2
118.7 mT
Italy
30.6 mT USA 91.4 mT
S. Korea 53.6 mT
3 5
Brazil 33.7 mT
6
9
Global crude steel Production: 1326.5 million tonnes (mT)
Source: IISI
TOP FIVE CONSUMER COUNTRIES OF STEEL
42.8%
31.02%
China United State Japan South Korea India ROW
10.37% 4.92% 4.16%
6.72%
Source: World Steel Association
? ? ?
?
? ?
?
?
Fifth largest producer of steel in the world and second largest producer of crude steel - Press Information Bureau Steel production reached 28.49 million tonne (MT) in AprilSeptember 2009. About 50% of the steel produced in India is exported. India accounts for over 7% of the total steel produced globally India accounts for around 5 per cent of the global steel consumption Huge Iron Ore reserves – 23 bn. tonnes Indian Steel Producers are increasingly looking for overseas acquisitions in steel as well as raw materials. Positive overall growth in the production of crude steel
?
India - world’s largest producer of direct reduced iron (DRI) or sponge iron with nearly 20 million tonnes production in 2008-09. Estimated steel production capacity 124 million tonnes by the year 201112. Generate additional employment of around 4 million by 2020 for production of around 295 million tonnes of crude steel by 2019-2020.
?
?
?
222 MoUs have been signed with various States for planned capacity of around 276 million tonnes
Source: JPC ( Joint Plant Committee )
Source: JPC ( Joint Plant Committee )
Indian Potential for Steel
Huge Potential for Demand
• High GDP growth rate of 8.80%( Nov 2010 ) • 1.20 billion population • Low per capita steel consumption of 40 kg (World av. 198 kg)
Skilled Human Resources
Growth factors for India
Abundant Iron Ore
Reserves 23 billion tonnes
Government Policy
• Stable currency • Easing of regulations • Strong Banking & judicial system • Encouraging trade relations with ASEAN and other countries • Infrastructure building • Exploring new Energy resources
Source: “Indian Steel Industry Outlook to 2012”
40
36.5
35 30 25 20 15
12.02 26.2 24.2
14.3
10 5 0
1.1 1.1
Controlled Regime 5.05
3.23 1.62
9.36 6.75
1951
1991
2005
Source: JPC ( Joint Plant Committee )
GROWTH SCENARIOS
Optimistic Case
Fin. Steel Cons. Growth Rate
Medium Growth
Consumption (mTpa)
Conservative
Fin. Steel Cons. Growth Rate Consumption (mTpa)
Consum- Fin. Steel ption Cons. Growth (mTpa) Rate
20052020
20202030 20302040 20402050
7.6%
6.5% 5.0% 5.0%
100
188 305 498
6.9%
5.5% 4.0% 4.0%
90 *
147 217 322
5.5%
4.5% 3% 3%
76
118 158 212
* - Also projected by National Steel Policy
Source: JPC ( Joint Plant Committee )
? ? ? ? ? ? ? ? ? ?
1st; 103.3 mmt; ArcelorMittal 2nd; 37.5 mmt; Nippon Steel 3rd; 35.4 mmt; Baosteel Group 4th; 34.7 mmt; POSCO 5th; 33.3 mmt; Hebei Steel Group 6th; 33.0 mmt; JFE 7th; 27.7 mmt; Wuhan Steel Group 8th; 24.4 mmt; Tata Steel 9th; 23.3 mmt; Jiangsu Shagang Group 10th; 23.2mmt; U.S. Steel Source: World Steel Association
? ? ? ? ? ? ? ? ?
TISCO JSW Essar Steel RINL MECON MOIL MSTC KIOCL NMDC
PUBLIC
? ?
PRIVATE
? ? ? ? ?
SAIL VISAKHAPATNAM STEEL PLANT
TATA-CORUS ESSAR ISPAT JSW STEEL LIMITED MUKAND LIMITED
?
FERRO SCRAP NIGAM LIMITED
BIRD GROUP OF COMPANIES
?
?
SPONGE IRON INDIA LIMITED
MECON LIMITED BHARAT REFRACTORIES LIMITED
? ?
STRENGTHS
• Abundant resources of iron ore
WEAKNESSES
•High cost of energy
•Low cost and efficient labour force
• Strong managerial capability • Strongly globalised industry and
•Higher duties and taxes
•Infrastructure •Quality of coking coal •Labour laws •Dependence on imports for
emerging global competitiveness
•Modern new plants & modernised
old plants
• Strong DRI production base • Regionally dispersed merchant
steel manufacturing equipments & technology development of mines
rolling mills
•Slow statutory clearances for
OPPORTUNITIES
• Huge Infrastructure demand
• Rapid urbanisation • Increasing demand for consumer durables • Untapped rural demand • Increasing interest of foreign steel producers in India
THREATS
• Slow growth in infrastructure development
• Market fluctuations and China’s export possibilities
• Global economic slow down
?
India does not provide direct subsidies for exports, although indirect subsidies on the nature of exemption from tax and import duty are provided. The Government of India implements the Export Promotion of Capital Goods (EPCG) scheme which provides for a reduction or exemption of customs duties and an exemption from excise taxes on imports of capital goods. The EPCG scheme has been countervailed in the US, Canada, as well as the EU.
?
26
GLOBALIZATION AND STEEL SECTOR
New Policies
Included in high priority list for Foreign Investment Withdrawal of import and Export restrictions
Positive Outcomes
• New Channels Opened • Enhanced Efficiency • National Steel Policy
Negative Outcomes
• Non-Tariff Barriers • Availability of Cheaper Steel
Year (April-March) 2006-07 2007-08 2008-09
FDI (In INR) 1281.51 53.48 3352.94
FDI (in USD) 27.84 1.32 69.21
2009-10(Apr-Dec 2009)
3945.17
81.57
Source: Department of Industrial Policy & Promotion
Market Share of Leading Players in Iron and Steel Industry
Company SAIL TISCO VIZAG STEEL ESSAR, JSL OTHERS TOTAL Production of Steel(in million tonnes) 13.5 5.2 3.5 8.4 14.5 45.1 Market share(in percentage terms) 32 11 8 19 30 100
Source: Department of Industrial Policy & Promotion
L N Mittal left country because of India’s restrictive economic policies. He went to Indonesia to set up ISPAT INDO.
?
Arcelor - Mittal
? 32.2bn$ deal ? Mittal pips Severstal
?
Tata-Corus
? 11.3bn$ deal ? Tatas pip CSN
32
INDIAN STEEL INDUSTRY A BRIGHT FUTURE
RESOURCES
?Abundant Iron Ore reserves ?Strong Managerial skills in Iron and Steel making ?Large pool of skilled Man-power ?Established steel players with strong skills in steel making
OPPORTUNITIES
?High economic growth driven increasingly by industry ?Faster Urbanisation ?Increased Fixed Asset Building ?Automobiles and component industry growth
POLICY
?Pro-active stance of Govt. ?Encouragement for overseas investments
• Indian steel industry exudes optimism but crisis should get over as soon as possible. • Investment in infrastructure is crucial to step up demand for steel.
• Supply may have to be rationalized in line with the demand (Dom + exports).
• Integrated Mills would hold the key in future growth of Indian Steel supplies. • New technologies to use indigenous natural resources would have to be developed.
35
? ? ? ? ?
Department of Industrial Policy & Promotion (www.dipp.nic.in) World Steel Association ( www.worldsteel.org ) Indian Steel Industry Outlook to 2012 Joint Plant Committee (http://www.jpcindiansteel.nic.in/about.asp ) International Iron And Steel Institute
doc_683440921.pptx
indan steel industry, steel sector trends, growth scenarios, swot analysis of steel sector, globalization and steel sector and government policies around steel sector.
? ? ? ? ? ? ? ? ? ?
Introduction Indian Steel Industry Steel Sector Trends Growth Scenarios Top 10 Players SWOT Analysis Government Policies Globalization And Steel Sector Recommendations References
? Steel is crucial to the development of any
modern economy and is considered to be the backbone of human civilisation.
? It is a product of a large and technologically
complex industry having strong forward and backward linkages in terms of material flows and income generation.
3
World Steel Industry – Top Ten
7
Germany 45.8 mT Russia 68.5 mT
4
8
Ukraine 38.6 mT
1
China 502 mT
10
Japan
2
118.7 mT
Italy
30.6 mT USA 91.4 mT
S. Korea 53.6 mT
3 5
Brazil 33.7 mT
6
9
Global crude steel Production: 1326.5 million tonnes (mT)
Source: IISI
TOP FIVE CONSUMER COUNTRIES OF STEEL
42.8%
31.02%
China United State Japan South Korea India ROW
10.37% 4.92% 4.16%
6.72%
Source: World Steel Association
? ? ?
?
? ?
?
?
Fifth largest producer of steel in the world and second largest producer of crude steel - Press Information Bureau Steel production reached 28.49 million tonne (MT) in AprilSeptember 2009. About 50% of the steel produced in India is exported. India accounts for over 7% of the total steel produced globally India accounts for around 5 per cent of the global steel consumption Huge Iron Ore reserves – 23 bn. tonnes Indian Steel Producers are increasingly looking for overseas acquisitions in steel as well as raw materials. Positive overall growth in the production of crude steel
?
India - world’s largest producer of direct reduced iron (DRI) or sponge iron with nearly 20 million tonnes production in 2008-09. Estimated steel production capacity 124 million tonnes by the year 201112. Generate additional employment of around 4 million by 2020 for production of around 295 million tonnes of crude steel by 2019-2020.
?
?
?
222 MoUs have been signed with various States for planned capacity of around 276 million tonnes
Source: JPC ( Joint Plant Committee )
Source: JPC ( Joint Plant Committee )
Indian Potential for Steel
Huge Potential for Demand
• High GDP growth rate of 8.80%( Nov 2010 ) • 1.20 billion population • Low per capita steel consumption of 40 kg (World av. 198 kg)
Skilled Human Resources
Growth factors for India
Abundant Iron Ore
Reserves 23 billion tonnes
Government Policy
• Stable currency • Easing of regulations • Strong Banking & judicial system • Encouraging trade relations with ASEAN and other countries • Infrastructure building • Exploring new Energy resources
Source: “Indian Steel Industry Outlook to 2012”
40
36.5
35 30 25 20 15
12.02 26.2 24.2
14.3
10 5 0
1.1 1.1
Controlled Regime 5.05
3.23 1.62
9.36 6.75
1951
1991
2005
Source: JPC ( Joint Plant Committee )
GROWTH SCENARIOS
Optimistic Case
Fin. Steel Cons. Growth Rate
Medium Growth
Consumption (mTpa)
Conservative
Fin. Steel Cons. Growth Rate Consumption (mTpa)
Consum- Fin. Steel ption Cons. Growth (mTpa) Rate
20052020
20202030 20302040 20402050
7.6%
6.5% 5.0% 5.0%
100
188 305 498
6.9%
5.5% 4.0% 4.0%
90 *
147 217 322
5.5%
4.5% 3% 3%
76
118 158 212
* - Also projected by National Steel Policy
Source: JPC ( Joint Plant Committee )
? ? ? ? ? ? ? ? ? ?
1st; 103.3 mmt; ArcelorMittal 2nd; 37.5 mmt; Nippon Steel 3rd; 35.4 mmt; Baosteel Group 4th; 34.7 mmt; POSCO 5th; 33.3 mmt; Hebei Steel Group 6th; 33.0 mmt; JFE 7th; 27.7 mmt; Wuhan Steel Group 8th; 24.4 mmt; Tata Steel 9th; 23.3 mmt; Jiangsu Shagang Group 10th; 23.2mmt; U.S. Steel Source: World Steel Association
? ? ? ? ? ? ? ? ?
TISCO JSW Essar Steel RINL MECON MOIL MSTC KIOCL NMDC
PUBLIC
? ?
PRIVATE
? ? ? ? ?
SAIL VISAKHAPATNAM STEEL PLANT
TATA-CORUS ESSAR ISPAT JSW STEEL LIMITED MUKAND LIMITED
?
FERRO SCRAP NIGAM LIMITED
BIRD GROUP OF COMPANIES
?
?
SPONGE IRON INDIA LIMITED
MECON LIMITED BHARAT REFRACTORIES LIMITED
? ?
STRENGTHS
• Abundant resources of iron ore
WEAKNESSES
•High cost of energy
•Low cost and efficient labour force
• Strong managerial capability • Strongly globalised industry and
•Higher duties and taxes
•Infrastructure •Quality of coking coal •Labour laws •Dependence on imports for
emerging global competitiveness
•Modern new plants & modernised
old plants
• Strong DRI production base • Regionally dispersed merchant
steel manufacturing equipments & technology development of mines
rolling mills
•Slow statutory clearances for
OPPORTUNITIES
• Huge Infrastructure demand
• Rapid urbanisation • Increasing demand for consumer durables • Untapped rural demand • Increasing interest of foreign steel producers in India
THREATS
• Slow growth in infrastructure development
• Market fluctuations and China’s export possibilities
• Global economic slow down
?
India does not provide direct subsidies for exports, although indirect subsidies on the nature of exemption from tax and import duty are provided. The Government of India implements the Export Promotion of Capital Goods (EPCG) scheme which provides for a reduction or exemption of customs duties and an exemption from excise taxes on imports of capital goods. The EPCG scheme has been countervailed in the US, Canada, as well as the EU.
?
26
GLOBALIZATION AND STEEL SECTOR
New Policies
Included in high priority list for Foreign Investment Withdrawal of import and Export restrictions
Positive Outcomes
• New Channels Opened • Enhanced Efficiency • National Steel Policy
Negative Outcomes
• Non-Tariff Barriers • Availability of Cheaper Steel
Year (April-March) 2006-07 2007-08 2008-09
FDI (In INR) 1281.51 53.48 3352.94
FDI (in USD) 27.84 1.32 69.21
2009-10(Apr-Dec 2009)
3945.17
81.57
Source: Department of Industrial Policy & Promotion
Market Share of Leading Players in Iron and Steel Industry
Company SAIL TISCO VIZAG STEEL ESSAR, JSL OTHERS TOTAL Production of Steel(in million tonnes) 13.5 5.2 3.5 8.4 14.5 45.1 Market share(in percentage terms) 32 11 8 19 30 100
Source: Department of Industrial Policy & Promotion
L N Mittal left country because of India’s restrictive economic policies. He went to Indonesia to set up ISPAT INDO.
?
Arcelor - Mittal
? 32.2bn$ deal ? Mittal pips Severstal
?
Tata-Corus
? 11.3bn$ deal ? Tatas pip CSN
32
INDIAN STEEL INDUSTRY A BRIGHT FUTURE
RESOURCES
?Abundant Iron Ore reserves ?Strong Managerial skills in Iron and Steel making ?Large pool of skilled Man-power ?Established steel players with strong skills in steel making
OPPORTUNITIES
?High economic growth driven increasingly by industry ?Faster Urbanisation ?Increased Fixed Asset Building ?Automobiles and component industry growth
POLICY
?Pro-active stance of Govt. ?Encouragement for overseas investments
• Indian steel industry exudes optimism but crisis should get over as soon as possible. • Investment in infrastructure is crucial to step up demand for steel.
• Supply may have to be rationalized in line with the demand (Dom + exports).
• Integrated Mills would hold the key in future growth of Indian Steel supplies. • New technologies to use indigenous natural resources would have to be developed.
35
? ? ? ? ?
Department of Industrial Policy & Promotion (www.dipp.nic.in) World Steel Association ( www.worldsteel.org ) Indian Steel Industry Outlook to 2012 Joint Plant Committee (http://www.jpcindiansteel.nic.in/about.asp ) International Iron And Steel Institute
doc_683440921.pptx