STEEL INDUSTRIES

Economics Project

SUBMITTED BY:• Akash Singh• Divya Gupta• Nimisha Dwivedi• Samriddhi Khare• Sunny Deo• Ajit Maharana

o India is the 5th largest producer of steel in the World.o In India the visionary Shri Jamshedji Tata set up the first Iron and o Presently, steel contributes to nearly 2% of the gross domestic

product (GDP). o The total market value of the Indian steel sector stood at US$ 57.8

billion in 2011 and is expected to touch US$ 95.3 billion by 2016. o Steel sector employees more than 2 million people across the

country.

INTRODUCTION

MAJOR PLAYERS IN INDIAo 2nd Largest producer of iron

ore in India.o 2nd Largest mines network

in India.o 5 Integrated plants across

India.

o Established Asia’s first integrated Steel plant in 1907.

o Company employed over 80,000 people across the world in nearly 50 countries.

Continued…..o Essar Steels are one of

the most versatile producers of steel-based products and tailor-made products.

o It produces over 300 grades of steel.

o Ranked 3rd in Metals category of Business World Companies Survey, 2011.

o Specialized in producing long rails for railways and large sized H-beams.

Continued….o Jai Balaji Group is one of the

largest manufacturers of steel in the private sector in Eastern India.

o It has sponge iron manufacturing unit with capacity of 105,000 per annum at Mangalpur Industrial Estate near Raniganj.

o Prakash group started in 1980 and has more than 30 years track record of stability, trust & growth.

o The company is the leading manufacturer of High quality stainless steel seamless and welded pipes, tubes and u- tubes.

44%

14%

14%

1%

14%

13%

SAIL

ESSAR

JINDAL POWER AND STEEL

JAI BALAJI INDUST.

TATA STEEL

PRAKASH INDUST.

MARKET SHARE

TRENDS IN EXPORT & IMPORT

Indian steel industry : Exports (in million tons)

Category 2009-10 2010-11 2011-12 2012-13 2013-14

Total Finished Steel (alloy + non alloy) 3.25 3.64 4.59 5.37 5.98Source: Joint Plant Committee

Exportso Iron & steel are freely exportable.o Last five year’s export  of total finished steel (alloy + non alloy) is

given below:-

Continued…..Importso Iron & steel are freely importable as per the extant policy.o Last five year’s import of total finished steel (alloy + non alloy) is

given below:-

Indian Steel Industry : Imports (in million tons)

Category 2009-10 2010-11 2011-12 2012-13 2013-14

Total Finished Steel (alloy + non alloy) 7.38 6.66 6.86 7.93 5.45Source: Joint Plant Committee

MAJOR ANNOUNCEMENT IN BUDGET

o Decrease in custom duty for bituminous coal from 5% to 2% and CVD from 6% to 2%.

o Increase in custom duty on steam coal from nil to 2% and CVD from 1% to 2%.

o Flat rolled products of iron or non-alloy steel, plated or coated with zinc to be exempted.

o Barriers to entryo Number of buyers &

sellerso Degree of control over

Price & Supplyo Availability informationo Transportation

o Advertisement cost

MARKET STRUCTURE

COST IMPLICATION OF BUDGET PROPOSAL

o The government imposed 2.5% duty on coking coal import, evoking reaction from the industry which said this could lead to increase in cost of steel production by Rs 200 tons.

o The government also raised import duty on flat-rolled stainless steel products to 7.5% from 5% earlier.

GOVERNMENT POLICY o Under the new industrial policy, iron and steel has been made

of high priority industries. o Price and distribution control have been removed as well as

Foreign Direct Investment upto 100% has been permitted,o The trade policy has also been liberalized and Import & Export

of Iron & Steel is freely allowed with no quantitative restrictions on import of iron & steel items.

MAJOR PROBLEM FACED BY THE INDUSTRY

o Raising Capital

o Lack of technology

o Low productivity

o Inefficiency of public sector unit

o Heavy demand

o Inferior quality product