India Metals Report Q1 2010
Business Monitor International, December 2009, Pages: 56
The India Metals Report provides industry professionals and strategists, corporate analysts, metals associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on India's metals industry.
The India government’s aggressive stimulus package appears to be paying off, raising the possibility that the measures will be brought to an end, given their impact on Indian industry. In September 2009, India’s industrial output grew 9.1%, for the ninth month in a row. This was much better than forecast, raising expectations of strong manufacturing activity in the remainder of the financial year to March 2010 on the back of buoyant domestic demand and a recovering global economy. The annual growth figure for August was also revised upwards to a 22-month high of 11% from 10.4%. Output of consumer durable goods such as home appliances and cars rose 22.2% year-on-year (y-o-y), thanks mainly to the stimulus package and the festive season. Industrial growth has helped boost steel consumption, which rose 5.7% y-o-y to 26.49mn tonnes in the first six months of the fiscal year.
The government expects demand to outstrip supply because of the increase in consumption for infrastructure, housing and cars in recent months. Production in the first seven months of the year has grown between 3 and 5% while demand growth is expected to average between 7 and 9%. Recent forecasts from the steel ministry estimate that India will produce 60mn tonnes of finished steel during the 2009/10 fiscal year, up 6% from 56.4mn tonnes the year before.
These are in line with the reports forecasts which see finished steel usage reaching 103.6mn tones by 2014. Meanwhile, Japanese steelmakers, unable to expand further in their domestic market, have shown an interest in expanding into the Indian market in the last quarter. Sumitomo Metal Industries is planning to build a steel plant with Bhushan Steel in Orissa and is tipped to buy a 5% stake in the Indian company. JFE Steel, Japan’s second largest steelmaker, signed a collaborative pact with JSW Steel in November. The two steelmakers plan to jointly produce automotive steel products and may acquire shares in each other. They are also contemplating joint construction and operation of a 10mn tonnes per annum (tpa) integrated steel plant in West Bengal. With JFE’s auto clients expanding in India’s fast growing car market, the Japanese steelmaker is willing to transfer its technology and management skills to JSW. Raw material security remains a top agenda for Indian steel companies.
The Steel Authority of India (SAIL) is actively pursuing licences for coking coal mines abroad to protect itself from the volatile commodities market and is locked in talks with firms in Australia, New Zealand, Mozambique and Indonesia. Tata Steel is looking into the possibility of forming a joint iron ore venture with New Millennium Capital in Canada while its European subsidiary, Corus, is reportedly seeking partners abroad to develop iron ore and coking coal mines. In the aluminium sector, India’s demand for fiscal 2009/10 is expected to rise 4-5%, according to the National Aluminium Company (Nalco), compared with the previous year’s 3% growth. Both Nalco and Hindalco suffered lower earnings in fiscal Q209/10 due to subdued commodity prices. However, Hindalco said downstream demand for aluminium in India has improved considerably compared with the second half of the last financial year and the outlook remained cautiously positive in both the short and long term.
Executive Summary
SWOT Analysis
- India Political SWOT
- India Economic SWOT
- India Business Environment SWOT
Special Focus: Outlook For Global Mining
- Table: Biggest Chinese Acquisitions In Australia Since 2005
Industry Trends And Developments
- Market Overview
- Regulatory Structure
- Latest Developments
- Table: Mines In India
Key Projects
- Iron
- Iron: Latest Developments
- Coal
- Coal: Latest Developments
- Table: State’s Coal Resources, 2007 (mn tonnes)
- Gold
- Gold: Latest Developments
- Copper
- Copper: Latest Developments
- Lead, Zinc And Silver
- Latest Developments
- Diamonds
- Uranium
- Bauxite And Alumina
- Bauxite And Alumina: Latest Developments
Mining Business Environment
- Regional Overview – Asia Pacific
- Table: Regional Mining Business Environment Ratings
- India – Business Environment Ranking
- Limits To Potential Returns
- Risks To Realisation Of Returns
- Legal Framework
- Table: BMI Legal Framework Ratings
- Labour Force
- Table: Demographic Indicators
- Foreign Investment Policy
- Table: India’s Annual FDI Inflows
- Table: Asia’s FDI Inflows
Political Environment
- Domestic Politics
Industry Forecast Scenario
- Metal Prices Outlook
- Aluminium To Average US$1,700/Tonne In 2009
- Table: BMI Aluminium Forecast
- Table: Aluminium
- Copper To Average US$4,800/Tonne In 2009
- Table: BMI Copper Forecast
- Table: Copper
- Commodities Forecast – Gold To Average US$920.00/oz In 2009
- Table: BMI Gold Forecast
- Global Industry Overview
- Regional Analysis
- India – Mining Industry Forecast
- Table: Mining Industry Indicators 2004-2014
Competitive Landscape
- Table: India Mining – Key Players
Company Monitor
- Coal India (CIL)
- National Mineral Development Corp (NMDC)
- Vedanta Resources
- Hindustan Copper (HCL)
Appendices
- Global Assumptions
- Table: BMI’s Global Assumptions, 2007-2013
- Table: Global And Regional Real GDP Growth, 2008-2011
- Table: Developed Market Exchange Rates, 2008-2011 (average)
- Table: Key Emerging Market Exchange Rates, 2008-2011 (average against US dollar)
- Appendix B: Business Environment Ratings
- Ratings Overview
- Table: Mining Business Environment Indicators
- Table: Weighting Of Components
- Coal India (CIL)
- National Mineral Development Corp (NMDC)
- Vedanta Resources
- Hindustan Copper (HCL)
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