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GLOBAL STEEL SCENARIO
• Globally Steel is considered as a cyclic industry.
• After last recession, Global Steel Industry has been
consolidating its position and has been marked by many
mergers and acquisitions.
• Appetite for steel by China has been the driving force of the
growth in production/consumption of Steel.
• Further growth in production/consumption is expected to
come from BRIC countries (Brazil, Russia, India and China).
• Cost/Availability of raw materials (mainly iron ore & coal) –
a major challenge.
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STEEL PRODUCTION
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LIST OF COUNTRIES BY STEEL PRODUCTION
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World Steel Industry – Top Ten
Source: IISI
9
48
3
2
S. Korea
53.6 mT
5
6
Italy
30.6 mT
10
Germany
45.8 mT
Ukraine
38.6 mT
7
USA
91.4 mT
Russia
68.5 mT
Brazil
33.7 mT
India
58.1 mT
1
China
502 mT
Global crude steel Production: 1326.5 million tonnes (mT)
Japan
118.7 mT
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CRUDE STEEL PRODUCTION (MILLION TONNES):Rank Country/Region 2007 2008 2009 2010 2011
— World 1,351.3 1326.5 1,219.7 1,413.6 1,490.1
1 People's Republic of China 494.9 500.3 573.6 626.7 683.3
2 Japan 120.2 118.7 87.5 109.6 107.6
3 United States 98.1 91.4 58.2 80.6 86.2
4 India 53.5 57.8 62.8 68.3 72.2
5 Russia 72.4 68.5 60.0 66.9 68.7
6 South Korea 51.5 53.6 48.6 58.5 68.5
7 Germany 48.6 45.8 32.7 43.8 44.3
8 Ukraine 42.8 37.3 29.9 33.6 35.3
9 Brazil 33.8 33.7 26.5 32.8 35.2
10 Turkey 25.8 26.8 25.3 29.0 34.1
11 Italy 31.6 30.6 19.7 25.8 28.7
12 Taiwan 20.9 19.9 15.7 19.6 22.7
13 Mexico 17.6 17.2 14.2 17.0 18.1
14 France 19.3 17.9 12.8 15.4 15.8
15 Spain 19.0 18.6 14.3 16.3 15.6
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WORLD RAW STEEL PRODUCTION BY REGIONS
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IRON MAKING
• For iron making, the essential feature is the blast furnace, where iron ore is melted (reduced) to produce pig iron. The furnace is charged from the top with iron ore, coke and limestone; hot air, frequently enriched with oxygen, is blown in from the bottom; and the carbon monoxide produced from the coke transforms the iron ore into pig iron containing carbon. The limestone acts as a flux. At a temperature of 1,600°C the pig iron melts and collects at the bottom of the furnace, and the limestone combines with the earth to form slag. The furnace is tapped (i.e., the pig iron is removed) periodically, and the pig iron may then be poured into pigs for later use (e.g., in foundries), or into ladles where it is transferred, still molten, to the steel-making plant.
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Steel making
• Pig iron contains large amounts of carbon as well as other impurities (mainly sulphur and phosphorus). It must, therefore, be refined. The carbon content must be reduced, the impurities oxidized and removed, and the iron converted into a highly elastic metal which can be forged and fabricated. This is the purpose of the steel-making operations. There are three types of steel-making furnaces: the open-hearth furnace, the basic-oxygen process converter and the electric arc furnace . Open-hearth furnaces for the most part have been replaced by basic-oxygen converters (where steel is made by blowing air or oxygen into molten iron) and electric arc furnaces (where steel is made from scrap iron and sponge-iron pellets).
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INDIAN STEEL INDUSTRY
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Tata Steel
RINL
SAIL
Mittal
POSCO
JSPL
EssarBhushan
MMK
JSWIspat
Sterlite
Proposed state-wise capacity additions upto 2012.
J’khand: 34 mtpa
W Bengal: 4 mtpa
Ch’garh: 9 mtpa
Orissa :38 mtpa
AP: 3.3 mtpa
Karnataka: 9.7 mtpa
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INDIA - PRESENT STATUS AND FUTURE PROJECTIONS
World Ranking in Production : 4th
World Ranking in Consumption : 3rd Projected Capacity by 2016-17 : 150 MT Projected Capacity by 2019-20 : 200 MT Projected Capacity by 2030 : 500 MT
Indian Steel Production is bound to grow manifold in years to come to sustain Growth in infrastructure /Construction, Automotive , Capital Goods and Consumer Durable Sector i.e economic growth .
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Skilled Human Resources
Abundant Iron Ore
Government Policy
Huge Potential for Demand• High GDP growth rate of 7%• 1 billion population• Low per capita steel consumption of 33kg (World av. 181 kg)
Reserves 23 billion tonnes
• Stable currency• Easing of regulations• Strong Banking & judicial
system
Growth factors
for India
•Encouraging trade relations with ASEAN and other coun-tries
• Infrastructure building• Exploring new Energy re-sources
Indian Potential for Steel
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STEEL - PRODUCTS
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SWOT ANALYSIS OF INDIAN STEELINDUSTRY
STRENGTHS•Abundant resources of iron ore
•Low cost and efficient labour force
•Strong managerial capability
•Strongly globalised industry and emerging global competitiveness
•Modern new plants & modernised old plants
•Strong production base
•Regionally dispersed merchant rolling mills
WEAKNESSES•High cost of energy
•Higher duties and taxes
•Infrastructure
•Quality of coking coal
•Labour laws
•Dependence on imports for steel manufacturing equipments & technology
•Slow statutory clearances for development of mines
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SWOT ANALYSIS OF INDIAN STEELINDUSTRY
OPPORTUNITIES• Huge Infrastructure
demand
• Rapid urbanisation
• Increasing demand for consumer durables
• Untapped rural demand
• Increasing interest of foreign steel producers in India
THREATS• Slow growth in
infrastructure development
• Market fluctuations and China’s export possibilities
• Global economic slow down
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MICHAEL PORTERS FIVE FORCES ANALYSIS
Buyers’ Power• Increasing Demand for Steel• Fragmented Coke Suppliers
Suppliers’ Power• High Raw Material Prices• Lack of Captive Source Hurting Steel Producers• Lack of Transportation• Backward Integration
Intensity of Competition• Competition from Foreign Players• Spurt in Merger and Acquisition Activities
Threat of New Entrants• High Cost of Basic Inputs and Services
Threat of Substitutes• Use of Aluminum/Plastic
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PEST ANALYSIS
Political Factors• National Steel Policy to Remove Bottlenecks
Economic Factors• GDP Growth Rate• Reduction in Customs Duty
Social Factors• Rural-Urban Divide• Higher Disposable Income
Technological Factors• Popularity of Steel Portals• Application of SML (Steel Markup Language)
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TOP PLAYERS
• ArcelorMittal • Nippon Steel • Baosteel Group • POSCO • Hebei Steel Group • JFE • Wuhan Steel Group • Tata Steel • Jiangsu Shagang Group • U.S. Steel Source: World Steel Association
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OTHER MAJOR STEEL PRODUCERS
•Tisco • JSW•Essar Steel •RINL •MECON •MOIL •MSTC •KIOCL •NMDC
