Steel Industry
Knowledge Series 7
Steel In The Veins
Steel is undoubtedly the one metal that has helped build most modern societies — and nations. And, as a nation of 1.3 billion people steps on the threshold of a new era, DhanBank PRU examines the nature of the beast that is the Indian steel industry.
Contents
Page No 1. 2. Why Steel? First Glance A) Demand Driver B) Pricing Trends C) Raw Material 3. Industry Structure A) B) C) D) E) 4. Major Players SAIL Tata Steel JSW Comparison 3 4 5 5 5 6 6 6 7 7 7 9 9 9 10 10 11 11 11 12 13
Global Scenario A) Chinese Economy B) Cheap Imports
5.
Growth Potential A) Govt Measures and Budget 2010
6.
Roadblocks A) Rising Raw Material Prices B) Financing Capacity Expansion
7. 8.
SWOT Analysis Annexure
2
R
Why Steel? apid progress in recent times has put India’s already poor and ageing infrastructure under pressure. The Indian government has sharply increased investment in infrastructure with several ambitious projects in the pipeline.
Looking to achieve a 9-10% GDP growth rate, the government plans to increase spending on infrastructure to 10% of the GDP from the current 4.8%. The finance ministry has provided Rs 1,73,552 crore for infrastructure development in FY11, which constitutes over 46% of the total planned allocation. All sectors falling under infrastructure are going to use steel intensively. The Indian economy shifted to the 8-9% growth rate trajectory in the 2004-09 period, causing a sharp pick-up in steel consumption, which registered a compounded annual growth rate (CAGR) of 13.7% during that time. The National Steel Policy 2005 was announced by the government to cater to the diversified steel demand and to achieve global cost competitiveness, quality and efficiency in production. The focus is to take indigenous production to 110 million tonnes by 2019-20, with a CAGR of 7.3% per annum. Currently, India’s steel production capacity falls short of demand and the gap has to be filled with
Steel In The Veins
Steel is undoubtedly the one metal that has helped build most modern societies — and nations. And, as a nation of 1.3 billion people steps on the threshold of a new era, DhanBank PRU examines the nature of the beast that is the Indian steel industry.
Contents
Page No 1. 2. Why Steel? First Glance A) Demand Driver B) Pricing Trends C) Raw Material 3. Industry Structure A) B) C) D) E) 4. Major Players SAIL Tata Steel JSW Comparison 3 4 5 5 5 6 6 6 7 7 7 9 9 9 10 10 11 11 11 12 13
Global Scenario A) Chinese Economy B) Cheap Imports
5.
Growth Potential A) Govt Measures and Budget 2010
6.
Roadblocks A) Rising Raw Material Prices B) Financing Capacity Expansion
7. 8.
SWOT Analysis Annexure
2
R
Why Steel? apid progress in recent times has put India’s already poor and ageing infrastructure under pressure. The Indian government has sharply increased investment in infrastructure with several ambitious projects in the pipeline.
Looking to achieve a 9-10% GDP growth rate, the government plans to increase spending on infrastructure to 10% of the GDP from the current 4.8%. The finance ministry has provided Rs 1,73,552 crore for infrastructure development in FY11, which constitutes over 46% of the total planned allocation. All sectors falling under infrastructure are going to use steel intensively. The Indian economy shifted to the 8-9% growth rate trajectory in the 2004-09 period, causing a sharp pick-up in steel consumption, which registered a compounded annual growth rate (CAGR) of 13.7% during that time. The National Steel Policy 2005 was announced by the government to cater to the diversified steel demand and to achieve global cost competitiveness, quality and efficiency in production. The focus is to take indigenous production to 110 million tonnes by 2019-20, with a CAGR of 7.3% per annum. Currently, India’s steel production capacity falls short of demand and the gap has to be filled with