Presented By SEC E Group 12

INDUSTRY PROFILE

STEEL INDUSTRY-OVERVIEW IMPORTANCE :

1)Crucial to development of modern economy 2)Level of per capita consumption of steel is an important indicator of socioeconomic development and living standard of people 3)Strong forward and backward linkages in terms of material flow and income generation

GLOBAL SCENARIO
1) In 2012 the world crude steel production reached 1518 million tonnes (mt) and showed a growth of 6.2% over 2011. (Source: World Steel Association or WSA) 2) China remained the worlds largest crude steel producer in 2012 (684 mt) followed by Japan (108 mt), the USA (86.4 mt) and India (77.62 mt; prov) at the 4th position (77.62 mt) 3) In 2013, it is forecasted that world steel demand will grow further by 4.5% to around 1486 Mt

Trends in India Steel Industry

In 2012-2013, India recorded Total Steel production of about 77.62 MT During 2012-2013, demand has grown by 4.6% y-o-y to 68.2 million tonnes. The World Steel Association forecasted local steel demand to grow at 5.9 per cent and 7 per cent in 2013 and 2014 respectively..

The Indian steel sector is contributing to nearly 2% of the GDP and employed over 5 lac people

DOMESTIC OUTLOOK AND FORECAST Domestic steel outlook remains weak with lesser possibility of turnaround in the current financial year Demand slowdown from key industries like construction, auto and infrastructure. A meaningful recovery in FY14 is unlikely as weaker rupee would delay rate cuts Most domestic steel firms may face margin pressure on lower prices and limited benefit from lower input costs (especially for iron ore) due to vertical integration and dependence on the local demand supply driven eauction ore. Net debt position of companies like Tata Steel and JSW Steel would rise with higher foreign-currency debt due to rupee depreciation

PLAYERS PROFILE

Major Steel Manufacturers

1.Total world crude steel production is 1547 MT in 2012. 2. China is the worlds largest producer of Crude steel ;India is the fourth largest producer of Crude Steel. 3.Major Players in world steel Industry- Largest player is Arcelor Mittal and Chinese dominance in World top 10 4.Steel manufacturing in India is by Public and Private players. - Largest public player: SAIL, Private player: TSL 5. Finished Steel products are divided in Long Products and Flat Products.

Steel Production Scenario in India in 2013-14

Profitability of Indian Steel Manufacturers

In India high level of competition has historically resulted in

lower operating margins compared to other commodity industries. Debt-equity ratio increased during FY2009-12 because of lower profitability.

Market Share of Major Players in India

The steel market in India is dominated predominantly by

SAIL with 32% market share. The second highest is TSL(Tata Steel Limited) with 23% market share.

2% 0

7%

Bhushan Steel Ltd 9% Jindal Steel & Power Ltd JSW Steel Ltd 23% Kalyani Steels Ltd Kirloskar Ferrous Industries Ltd. Monnet Ispat & Energy Ltd

23%

32%

1% 1% 1%

Steel Authority of India Ltd Tata Steel Ltd Usha Martin Ltd

India Steel Market Share:%share by value,2011-12 Source:CRISIL Research

MACROECONOMICS

Key Policies driving growth

National Steel Policy 2005
Issues to address:
Allowing Private Ownership and Foreign Investment Improving Intellectual Property Laws Deregulation of Pricing and Distribution of Iron and

Steel Special Economic Zones (SEZs) Special Investment Regions Impact of union budget 2013-14

FDI in Steel Industry

FDI cap limit in this sector is 100% FDI in Steel has witnessed a growth of 60.73% at US $ 1,765.07 million POSCOs 12 (MTPA) in Orissa entailing an investment of Rs52,000 crore,

POSCOs Karnataka project of 6 MTPA with an investment of Rs32,000 crore

Arcelo Mittals Orissa project of 12 MTPA with Rs40,000 crore investment,

Arcelor Mittals Jharkhand, Karnataka state projects with a capacity of 12 MTPA, 6 MTPA and investment of Rs50,000 crore and Rs30,000 crore

respectively.
NMDC-Severstal has proposed an investment of Rs9000 crore for 3 MTPA

plant in Karnataka and Tata Steel-Nippon Ltd has proposed 60,000 tonnes project in Jharkhand entailing an investment of Rs2300 cr.

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