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Challenges in Growth OF Indian Steel Industry: Monnet Ispat & Energy LTD
Challenges in Growth OF Indian Steel Industry: Monnet Ispat & Energy LTD
OF
INDIAN STEEL INDUSTRY
SCENARIO
Global steel moved from sunset to sunrise industry between 2001-2007 with sustained 8% demand growth.
Global crude steel production : 2009-1220 Mn. Mt ; 2008-1326 Mn. Mt- decline of 8 %
China- the largest crude steel producer in the world - production 567.8 Mn. Mt, a growth of 13.5 % over 2008.
The global recession and sever meltdown in the late 2007 -shifting the fortunes of global steel from the advanced to
emerging markets.
GLOBAL STEEL
Europe, 194.73,
Oceania, 6.01, 0.49%
15.88%
Rest Asia, 151.88,
12.39%
South America,
37.82, 3.08%
China, 567.84,
46.32%
Middle East, 16.59,
1.35%
GLOBAL STEEL
Difference between global and domestic price evens out over a quarter in free market scenario.
Low priced stock requirement and non-prime material are also imported and then segregated and sold
as prime materials and this further exert pressure on price.
Owning to excess availabilities and increase in raw material price, the margins of steel producers are
increasingly under pressure for over one year.
GROWTH DRIVERS
INDICATORS
Current Domestic steel consumption was at 56.5 Mn. Mt increased by
7.8 per cent, which is likely to maintain its growth momentum.
In 2008-09, per capita steel consumption in urban areas was 145 Kg,
rural areas-only 3 Kg.
70% of Indian population in rural areas- increased steel usage for
rural housing, panchayat hall, rural bridges, water and storage tanks
etc
The sectors like manufacturing,construction,consumer durables,
capital goods, intermediate goods coupled with infrastructure
spending to fuel growth in steel sector.
GROWTH DRIVERS
INFRASTRUCTURE SPENDING
India is largely sufficient in raw materials for Iron and Steel Industry
25 billion tonnes of iron ore reserves - the fifth largest reserve base in the
world
253 billion tonnes, (96 billion tonnes proven reserves) Coal- 4th largest
proven coal reserves in the world
World’s
2nd largest Mn reserves (240 million tonnes).
3rd largest Cr reserves (57 million tonnes).
4th largest bauxite reserves (2.4 billion tonnes).
India -currently the 5th largest producer of crude steel in the world and is
expected to become the 2nd largest producer of crude steel in the world by
2015-16.
GDP growth pegged at 8.5 % in the current year and higher in the subsequent
year.
The growth rate in steel consumption in India would be highest in the world
surpassing China in 2011-12.
PROSPECTS FOR INDIAN STEEL INDUSTRY
Sponge/Scrap Corex
Corex
IF/EAF BF-BoF
4%
25%
DRI-EAF (Gas Based)
BF-BoF
41% DRI-EAF (Coal Based)
Sponge/Scrap IF/EAF
DRI-EAF (Coal
Based) DRI-EAF (Gas
19% Based)
11%
Distribution Pattern is likely to be similar after completion of capacity expansion upto 124 Mn Mt.
PROSPECTS FOR INDIAN STEEL INDUSTRY
LAND
ENVIRONMENT ISSUES
INFRASTRUCTURE
OTHERS