stainless steel flange

8/3/2019 stainless steel flange

1/5

Secondary data

GLOBAL steel PERSPECTIVE

In the past few years the stainless steel industry has witnessed some tremendous

changes in the international steel market. Steel products are enjoying growth in

structural demand which is a result of the development of application technology

and fall in prices, both of these factors has diverted many consumers to stainless

steel application (Wikes and Woodley, 1998). Growing consumer superiority

influenced industries like oil and gas, construction and other capital demanding

industries and these sectors witnessed a major growth in demands. Thus, leading to a

further increase of 9% in world steel usage in 2006. Hence, making the industry more

challenging and dynamic in nature. (International iron and steel institute, 2006). As

Nickel is the most important ingredient in the stainless steel products. Nickel, being

the only component which is traded on the commodity market makes it more

impeccable in nature for the steel products and dominant on the global steel prices.

Ever increasing globalisation has been prominently acting upon the commodities

market, it did emphasize its important on some the very unpopular metals like nickel,

and commoditization on nickel increased in the mid 21 st century and did impact in the

upward movement of the steel prices globally. This movement in the prices had a big

impact on some of the global products grade like 304, 316 and 316L, which accounts

for 65% of the total steel consumption in the stainless steel industry. This price

movements in the commodity market (especially on Nickel) has resulted in significant

decrease in prices in stainless steel products, hence turning this market to be more

transparent and enabling product differentiation to become a bit more difficult than

ever (Wikes and Woodley, 1998). Commoditization also allowed reorganizing the

production process in order to gain competitive advantage. The unwanted effect of the

volatile Nickel prices on the stainless steel industry is minimized due to the low

content of the nickel in these grades. Still the increasing global consolidation(steel

manufacturer in the same country venturing together) and continues rising cost of raw

material forced all manufactures to pursue cost leadership by simplifying and

evaluating the process and scale, or by adapting niche business structure in specialist

steel.


2/5

This increasing competition is forcing a large number of manufacturers to optimize

their operations to stay on edge. In order to become competitive, companies are now

seeking to analyse and concentrate on both internal as well as external challenges

which are created by the revolution that took place in stainless steel industry.

According to IISI, some companies have been selling their products way below the

actual market price just to survive and sustain the competition.

Steel Industry- The Indian Scenario

India is the seventh largest producer of steel in the world, looking closely at the world

market figures Indian steel industry has 2% of the market share at the international

level. Having a closer look at the root level of the steel industry in India, the industry

can be categorized into two categories: The first category comprises of the

internationally recognized firms which includes Tata Group, Steel Authority of India

(better known as SAIL) and Rashtriya Ispat Nigam Limited (RINL). The firms in the

first category have a capacity ranging 4mt- 5mt. These firms have now established

themselves in the international markets and have been entering into Mergers and

Acquisition. The secondary group consists of all the firms which have a production

capacity of less than first group, it includes companies like Jindal Group, Ispat and

Essar and all small and medium sized enterprises which has the production capacity

between 3Mt to 4Mt. The industries in the above categories contribute about 70% of

the market share of the Indian Steel Industry.

The mark of the growth of Indian Steel industry can be traced back from 1992-93, the

growth of the Indian steel industry was marked at 22% high influenced by the

economic reforms. The following year also witnessed a respectable amount of growth


3/5

recorded at 14%. But with the development in the other industries the following few

years were not so good for the industry with not really much development and the

investors getting off to other industries. The real growth in the Indian steel industry

was seen after the liberalization of the Indian steel industry, but still the problems of

low productivity were surrounding the industry. The graph below shows the

consumption and productivity trends from financial year 2000-01 to 2005-06 which

evidently shows that the performance of Indian Steel Industry have constantly

improved since liberalization.

Finished steel Production and Consumption

0

5

10

15

20

25

30

35

40

2000 2001 2002 2003 2004 2005

MetricTo

nnes

consprod

Source: JPC/Internal


4/5

Analysis of Indian Steel Industry

Reference

http://www.worldsteel.org/?action=storypages&id=213

Steel Industry- The Indian Scenario

India is the tenth largest producer of steel in the world, looking closely at the world

market figures Indian steel industry has 2% of the market share at the international

level. Having a closer look at the root level of the steel industry in India, the industry

can be categorized into three categories: In the first category falls the internationally

recognized firms which include Tata Group, Steel Authority of India (better known as

SAIL) and Rashtriya Ispat Nigam Limited (RINL). The firms in the first category

have a capacity ranging 4mt- 5mt. The firms like Jindal Group, Ispat and Essar group

falls in the second category of steel producers in India as their capacity ranges

between 3Mt- 4Mt. The industries in the above categories share the 70% of the

market share of the Indian Steel Industry. The third category includes the small scale

industries with very low capacity.
http://www.worldsteel.org/?action=storypages&id=213http://www.worldsteel.org/?action=storypages&id=213


5/5

The mark of the growth of Indian Steel industry can be traced back to 1992-93, the

Indian growth of the industry was marked 22% influenced by the economic reforms.

The following year also witnessed a respectable amount of growth recorded at 14%.

But with the development in the other industries the following few years were not so

good for the industry with not really much development and the investors getting off

to other industries. The real growth in the Indian steel industry was seen after the

liberalization of the Indian steel industry, but still the problems of low productivity

were surrounding the industry. The graph below shows the consumption and

productivity trends from financial year 2000-01 to 2005-06 which evidently shows

that the performance of Indian Steel Industry have constantly improved since

liberalization.

Finished steel Production and Consumption

0

5

10

15

20

25

30

35

40

2000 2001 2002 2003 2004 2005

M

etricTonnes

cons

prod

Source: JPC/Internal

Analysis of Indian Steel Industry

Documents

stainless steel flange