Trends Shaping the Steel Industry

Jamshedpur Works, Jul 201605.06.2018

Trends Shaping the Steel Industry

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Megatrends shaping the future...

Major shifts in the past...

Trends Shaping the Steel Industry

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Major shifts in the past...

Megatrends shaping the future...

< 5%

35%

55%

1990 2005 2016

60% of steel making capacity owned by governments in 1980s, currently 30 – 40 %

1950 1980 - 1990 2000

Japan Europe South Korea

POSCOChina - share of private

producers

Fewer distortions, faster supply correction in down cycles

I nc reas ing Pr iva t i sa t ion

Transition from government owned to private ownership

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Steel demand in China rose from 138 Mnt in 2000 to 737 Mnt in 2017

5

0

200

400

600

800

2001 2004 2007 2010 2013 2016

Steel demand in China and Steel Prices

China - Steel Consumption (Mnt)

Steel Prices (USD/t)129

568832720

761

859

0

400

800

1200

1600

2000

2000 2008 2017

China: Share of global steel production

15%

43%

49%

Supply side policy intervention and domestic demand in China - major

factors influencing steel and raw material prices

Mnt

Rapid rise of Chinese steel industry

RoW

China

6

Next set of 50+ mtpa steel companies emerging in China

1970 - 1980 1990 2000 2010

Baoshan I&S Corp.

ShanghaiMetallurgical Xinjiang Ba Yi

I&S

Wuhan Corp.

Guangdon Shouguan I&S

Nippon Steel[Yawata + Fuji]

Sumitomo

ArcelorUsinor

AceraliaArbed

MittalSteel

SibalsaSidbecKarmet

Inland ISG

+ Several others

Formation of Usinor, Aceralia and Arbed

through consolidation

Consolidation and the emergence of Global majors

Trends Shaping the Steel Industry

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Megatrends shaping the future...

Major shifts in the past...

• Indian steel demand to grow the fastest at 5% - 6% p.a. (2018 - 2025)

• Urbanization to drive steel demand in Construction & Infrastructure and the

automotive sector

• Growing rural demand for steel – currently an under-addressed opportunity

Emerging economies to

lead global growth

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Faster urbanization in

emerging economies

Young India in an aging

world

Implications for Indian steel industry

Economic Demographic

Megatrends shaping the future..

Increasing influence of

communities – amid rising

disparities

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Digitalization: IOT,

Robotics etc. rapidly

becoming accessible

Climate change influencing

policy, choice of technology

and material

• Licence to operate to become increasingly difficult

• Reduce carbon footprint, increase waste use and recycling.

• Leverage digital technologies across steel value chain.

Implications for the Global steel industry

Socio-Political Environment Technology

Megatrends shaping the future..

Thank You

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