iron&steel industry in india

Presented By:

Presented By:

ANJALI THAKURGARIMA JAIN

INDIAN STEEL

INDIAN STEEL

INDUSTRY

INDUSTRY

REPORTREPORT

ONON

LAKHAN PAL

ABHISHEK JAISWAL

ASHISH SRIVASTAVA

PRESENTED TO:

PROF.

AMIYA

MOHAPATRA

Introduction Steel is crucial to the development of any

modern economy and is considered to be the backbone of the human civilization.

The level of per capita consumption of steel is treated as one of the important indicators of socio-economic development and living standard of the people in any country.

It is a product of a large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation.

All major industrial economies are characterized by the existence of a strong steel industry and the growth of many of these economies has been largely shaped by the strength of their steel industries in their initial stages of development.

Overview of the IndianIron & Steel Industry

Current 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 3 rd largest producer of crude steel in 2015 and the country continues to be the largest producer of sponge iron or DRI in the world.

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.

Current Global Scenario In 2014, the world crude steel production reached 1665 million tonnes (mt) and showed a growth of 1% over 2013.

China remained the world’s largest crude steel producer in 2014 (823 mt) followed by Japan (110.7 mt), the USA (88.2 mt) and India (86.5 mt) at the 4th position.

WSA has projected Indian steel demand to grow by 6.2% in 2015 and by 7.3% in 2016 as compared to global steel use growth of 0.5% and 1.4% respectively. Chinese steel use is projected to decline in both these years by 0.5%.

Per capita finished steel consumption in 2014 is estimated at 217 kg for world and 510 kg for China by WSA

(Note: 2014 data source is provisional and sourced from ‘World Steel in Figures 2015’, published by WSA in June 2015)

Types Of Steel

Stainless

Form/Size/Shape

STEEL

Medium carbon

Silicon electrical

Low carbon

End Use

Liquid steel

Crude steel

Semis

Composition

Deep drawing steel

Rail steel

Structural steel

Non-flat products

Non alloy steel

Alloy steel

High carbon

Construction steel

High speed

Foreign quality steel

Ingots

Finished steel

Flat products

Production Steel industry was de-licensed and de-controlled in 1991 & 1992

respectively.

Today, India is the 3 rd largest producer of crude steel in the world.

In 2014-15, production for sale of total finished steel (alloy + non alloy) was 91.46 mt, a growth of 4.3% over 2013-14

. Production for sale of Pig Iron in 2014-15 was 9.7 mt, a growth of

22% over 2013-14.

India is the largest producer of sponge iron in the world with the coal based route accounting for 90% of total sponge iron production in the country.

Indian Iron & Steel Industry : Production for Sale (in million tonnes)

Category 2010-11 2011-12 2012-13 2013-14 2014-15Pig Iron 5.68 5.371 6.87 7.95 9.694

Sponge Iron25.08 19.63 14.33 18.2

20.38

Total Finished Steel (alloy +

non alloy)

68.62 75.7 81.68 87.67 91.46

Source: Joint Plant Committee

Consumption Currently, the steel consumption in India is second only to China.

However, with the steel consumption in China expected to moderate at around 3%,India is likely to emerge as the fastest growing steel consuming nation.

Further, India's current per capita finished steel consumption at 52 kg is well below the world average of 203 kg. But with the rising income levels expected to make steel increasingly affordable, there is a vast scope for increasing per capita consumption of steel, in India.

The Indian steel sector enjoys advantages of domestic availability of raw materials and cheap labour.

Iron ore is also available in abundant quantities. This provides major cost advantage to the domestic steel industry.

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

The Government has raised import duty on most steel imports by 2.5%, taking the import duty on carbon steel flat products to 10% and that on long products to 7.5%.

Data on import of total finished steel (alloy + non alloy) is given below for last five years:

Imports

Category 2010-11 2011-12 2012-13 2013-14 2014-15

Total Finished

Steel (alloy +

non alloy)

6.66 6.86 7.93 5.45 9.32Source: Joint Plant Committee

Indian steel industry : Imports (in million tonnes)

Exports Iron & steel are freely exportable.

Currently, basic excise duty for steel is set at 12.5% and there is no export duty on steel items.

The government has also imposed export duty of 30% on all forms of iron ore except low grades which carry a duty of 10% while iron ore pellets have a export duty of 5% .

Data on export of total finished steel (alloy + non alloy) is given below for last five years:

Indian steel industry : Exports (in million tonnes)

Category 2010-11 2011-12 2012-13 2013-14 2014-15

Total Finished

Steel (alloy + non alloy)

3.64 4.59 5.37 5.98 5.59

Source: Joint Plant Committee

Opportunities for growth of Steel in Private Sector

The Growth Profile

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.

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.

Steel Prices

IMPACT OF GOVERNMENT INITIATIVES

As a facilitator, the Government monitors the steel market conditions and adopts fiscal and other policy measures based on its assessment.

For ensuring quality of steel several items have been brought under a quality control order issued by the Government.

Further, a Steel Price Monitoring Committee has been constituted by the Government with the aim to monitor price rationalization, analyze price fluctuations and advise all concerned regarding any irrational price behaviour of steel commodity.

The government provides subsidies to the steel distributed through State Small Industries Corporations (SSICs) , for the benefit of the small customers.

Conclusion

Increasingly it is being argued that there is a limit to which the economic regulation can attempt to ‘mimic’ the social welfare results of competition.

The classical perspective is that the objectives of low prices, efficiency and innovation are best

secured when one does not aim at them directly.

Steel sector was the first to be liberalized and as our study shows there are enough players;

though the industry is concentrated in some segments. However, this is no way suggests that the sector should be subject to regulation, which also includes the government

Thus, any suggestion of setting up an independent steel regulator goes against the standard philosophy of regulation.

Regulation should thus be restricted to case of market failures like natural monopolies, externalities and asymmetric information between buyers and sellers

Bibliography

WWW.GOOGLE.COM

WWW.CCI.GOV.IN

WWW.STEEL.NIC.IN