|
|
 |
|
Viewing report
|
|
|
|
India Steel Industry 2H 2010
Emerging Markets Direct, April 2011, Pages: 93
The Indian steel industry has had a tremendous performance in terms of production, capacity utilization, exports, and consumption, which has made India a major competitor in the world. The good performance was helped by deregulation and decentralization of the industry, as well as rising prices, exports, and consumption. According to market analysis, the outlook for the domestic operating environment is positive, driven by robust growth in infrastructure, auto and construction.
In 2010, India became the fourth largest producer of crude steel in the world, rising from eighth position in 2003, and is expected to become the second largest producer of crude steel in the world by 2015. India also maintained its lead position as the world’s largest producer of direct reduced iron (DRI) or sponge iron. The Indian steel industry is segregated into primary, secondary and stand alone producers. India expanded crude steel production from 51.17 million tonnes per annum (mtpa) in 2005-06 to 72.96 mtpa in 2009-10. Crude steel production grew at 8.4 per cent annually from 46.46 MT in 2005-06 to 64.88 MT in 2009-10. Industry analysts anticipate that capacity in the country is likely to reach 120MT by 2012.
Integrated steel producers account for 67% of the total production, and secondary steel producers account for the balance of India’s steel production. India is one of the largest producers of sponge iron in the world with an installed capacity of 9 million tonnes. The industry contributes 1.3% to Indian GDP and accounts for 10% in excise duty collections. India’s Tata Iron & Steel Company (TISCO) is one of cheapest producers of steel in the world. India’s per capita steel consumption is 20 kgs versus 80 kg in China, 405 kg in Malaysia and 925 kg in South Korea. Some of the challenges the industry faces are the supply of scrap steel, the availability and price of imported coke, high export demand for iron ore, and substitutes for steel gaining strong footholds in the metal market. Apart from market forces, the Indian steel industry uses technology that is outdated in developed nations. The country doesn’t have adequate infrastructure facilities to export steel in terms of ports, finance, and availability of continuous power. The relationship between iron ore producers and integrated producers is missing. With the steel policy in force from October 2004 and the current expansion of infrastructure facilities, all issues are expected to be addressed in the next few years.
The National Mineral Policy 2006 has targeted the issues relating to transferability of prospecting and mining leases, streamlining criteria for grants of mineral concessions, transparency in the mine allocation process, land acquisition reforms, and forward looking resettlement and rehabilitation policy guidelines. It is hoped that an early enactment and implementation of the new policy will positively contribute towards achieving India’s target of attaining 200 million by 2020.
Despite the various issues, steel companies have performed well in recent years and are expected to perform well in coming years. But the industry needs to solve such issues as developing new steel capacity, the conditions of raw material markets, potentially large shifts in steel trade flows, as well as those related to water management, energy, logistics and waste disposal.
|
|
|
|
