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Viewing report
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India Steel Market
GBC Consulting, July 2011, Pages: 70
The main objective of India's public policy is to create positive business confidence and attract higher level of investments in order to achieve 9.0 percent growth in 2012.
The key driver for the Indian economy lies in its strong domestic demand, mostly driven by the purchase of consumer durables and automobiles. India's growth potential is reflected in various reforms, ranging from financial sector, institutional, infrastructural to new tax-based and educational reforms.
As part of the liberalization process, the steel industry moved away from central planning to a decentralized, market-based system. Price control was abolished, and producers have the freedom to determine their selling price in accordance with the forces of demand and supply. There are no longer restrictions on imports, exports, distribution, and capacity.
India also emerged as the largest sponge iron producing country in the world in 2010, a rank it has held on since 2002. If proposed expansion plans are implemented as per schedule, India may become the second largest crude steel producer in the world by 2015-2016. The industry currently provides employment to around 2 million people, directly or indirectly.
Primary producers alone contribute around 68% of steel whereas secondary producers contribute the rest. At present steel demand is strong because of growth in the automobile sector and the construction industry. In the recent global meltdown demand for steel in India fell, but not to the degree it dropped elsewhere in the world. The Ministry of Steel has set a target to achieve 100 Mt of steel production by 2019-2020. Steel consumption in India is expected to outgrow GDP growth and should increase at a rate of 10% in coming years.
The Indian steel industry is divided into two discrete categories: integrated producers and secondary producers.
The major producers, known as integrated steel producers (ISPs), are prominent steel producers that have integrated steel- making competence plus capacities of more than one million tonnes.
Integrated steel producers have traditionally integrated steel units with captive plants for iron ore and coke, which the main inputs to these units. The integrated producers constitute most of the mild steel or “plain carbon steel” production in India. Their main products include flat steel products such as hot rolled, cold rolled and galvanized steel. The leading companies in steel producing in 2010 were Tata, SAIL and JSW. These companies are engaged in the production of multi-purpose and multi-service steel products such as sections, flat-rolled products, tubular products, specialty steel products etc. In many countries, there is a tendency for high volume end-users to purchase direct, while low-volume customers buy from stockholders and service centers.
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