A Review of developments in

The Global & Indian Steel Industry

Monthly edition

Issue No. 44

November 2019 (Covering October 2019)

Compiled on behalf of Indian Steel Association,

By Mr. Anup Kashyap,

Deputy Manager-Technical

Strictly for Internal circulation

About the Report

❑ The Indian Steel Association introduced a monthly report titled ‘A REVIEW

OF DEVELOPMENTS IN GLOBAL & INDIAN STEEL INDUSTRY’, from August

2016.

❑ The report provides general background information reviewing the status

of the developments in the global and Indian steel industry, pertaining to

raw material, production & consumption, trade, shipping, pricing &

forecasts, country reportage, policy developments, economic parameters

etc.

❑ The consistent format of the report provides an insight into the relevant

aspects of steel scenario globally and domestically .

❑ The information has been sourced from independent third party databases,

knowledge sources and news reports, and the authenticity of the same has

not been independently verified by ISA.

❑ The report is issued in the last week of each month to the members of

Indian Steel Association , various ministries / departments / institutions.

Contents of the Report

SI.

No

Title Page

Number

1. Global Economic Development 4-6

2. Global Steel Development 7-13

3. Domestic Steel Development 14-18

4. Indian Economic Development 19-21

5. About ISA 21-28

GLOBAL ECONOMIC DEVELOPMENTS

4

Source: Global Forecasting Service, The Economic Intelligence Unit 5

In % 2019 2020 2021 2022 2023 2024

India

Real GDP Growth 5.2 6.7 6.8 6.7 6.5 6.4

Inflation 3.4 4.1 4.2 4.4 4.6 4.3

China

Real GDP Growth 6.2 6.1 5.8 5.5 5.3 5.0

Inflation 2.7 3.1 2.7 2.9 2.7 2.5

U.S.A

Real GDP Growth 2.3 1.7 1.8 2.0 1.8 2.2

Inflation 1.8 1.6 1.9 2.1 1.8 1.8

Japan

Real GDP Growth 1.0 0.4 0.9 1.2 1.1 1.0

Inflation 0.9 1.4 0.9 1.1 1.3 1.4

EU 28

Real GDP Growth 1.4 1.4 1.2 1.8 1.7 1.7

Inflation 1.5 1.5 1.8 1.9 1.9 1.9

As of 20th November 2019

The assumptions for forecasts are available on the website of the Economist Intelligence Unit

Country-wise Growth Forecasts

2019 - 2024

Source: Atradius Global Service 6

▪ The global economy is losing steam in 2019 and 2020. As the trade war accelerates this,

consumer resilience will help avoid recession.

▪ Global economic growth is slowing and becoming increasingly fragile. As the trade war

weighs in, global trade and investment are down. External-facing businesses and industries

are grappling with uncertainty, but these challenges have not (yet) severely constrained

private consumption. Steady domestic demand, especially in advanced economies, will be

the key to avoiding recession in 2020.

▪ Atradius Global Service forecast global GDP growth to expand 2.5% in both 2019 and

2020 – a remarkable slowdown from the 3.2% measured in 2018. The world trade

slowdown, made worse by the US-China trade conflict, is behind the deceleration.

▪ Emerging markets are also facing a slowdown due to the weak global trade environment as

well as country-specific issues. As a whole, Atradius Global service forecast GDP growth

across EMEs to ease to 4.0% this year, from 4.7% last year, before recovering only slightly to

4.3% in 2020. Emerging Asia will continue to post the fastest growth rates as Latin

America’s recovery drags on.

Global Economic Outlook

Nov. 2019

GLOBAL STEEL DEVELOPMENTS

7

Source: World Steel Association 8

Global Steel Outlook

Nov. 2019

➢ World crude steel production for the 64 countries reporting to the World Steel Association (world

steel) was 151.5 million tonnes (Mt) in October 2019, a 2.8% decrease compared to October 2018.

➢ Asian countries like China’s crude steel production for October 2019 was 81.5 Mt, a decrease of 0.6%

compared to October 2018. India produced 9.1 Mt of crude steel in October 2019, down 3.4% on

October 2018. Japan produced 8.2 Mt of crude steel in October 2019, down 4.9% on October 2018.

South Korea’s crude steel production was 6.0 Mt in October 2019, a decrease of 3.5% on October

2018.

➢ In the EU, Germany produced 3.3 Mt of crude steel in October 2019, down by 6.8% on October 2018.

Italy produced 2.2 Mt of crude steel in October 2019, down by 3.7% on October 2018. France

produced 1.2 Mt of crude steel in October 2019, a 10.6% decrease compared to October 2018. Spain

produced 1.2 Mt of crude steel in October 2019, down by 7.6% on October 2018.

➢ The US produced 7.4 Mt of crude steel in October 2019, a decrease of 2.0% compared to October

2018.

➢ Brazil’s crude steel production for October 2019 was 2.6 Mt, down by 19.4% on October 2018.

➢ Turkey’s crude steel production for October 2019 was 2.7 Mt, down by 15.0% on October 2018.

➢ Crude steel production in Ukraine was 1.6 Mt this month, down 12.7% on October 2018.

Source: World Steel Association press released in November 26th 2019

➢ Total Crude steel production from January to October -2019 was 1541 MT.

➢ The region wise crude steel production is provided in chart below.

RegionJan –Oct. 2019 in

(MT)

Jan- Oct.2018 in

(MT)

% Change

EU-28 135.46 140.57 -3.6

CIS 83.778 83.727 +0.1

N. America 100.722 100.700 0.0

S. America 34.661 37.780 -8.3

Africa 11.537 12.133 -4.9

Middle East 30.741 29.456 +4.4

Asia 1108.619 1050.338 +5.5

Oceania 5.146 5.359 -4.0

World 1541.644 1494.234 +3.2

Region wise Crude Steel Production

November 2019

➢ Year onYear this reflects an increase of crude steel production over Jan-Oct. 2018 of 3.2 %.

9

Source: World Steel Association press released in November 26th 2019 10

Nation Jan-Oct’19 Jan-Oct’18

China 829.215 771.781

India 93.306 90.724

Japan 83.791 87.197

United States 73.539 71.731

South korea 60.121 60.378

Russia 59.341 59.390

Germany 33.875 35.519

Turkey 27.913 31.287

Brazil 27.216 29.787

Top Crude Steel Producing nation

As Per World Steel Association –Jan-Oct2019

Source: Steel mint research 11

Rise in Steel Capacity in ASEAN Countries

➢ Steel Capacity in six major ASEAN countries is projected to reach 144.2 per annum in the next 3 to 5

years. This would mean that the ASEAN-6 countries like Singapore, Vietnam ,Indonesia, Philippines

,Thailand and Malaysia would add on 60.5 MTPY of steel capacity to their exiting capacities.

➢ For example ,Yeoh cited a 10 million ton per year carbon steel project at Sarawak Samalaju Industrial

Park in East Malaysia planned by Wen’an Iron and Steel Co. a steel maker in Wu’an city of Hebei

province that is set for commissioning in 2021 or 2022 and HBIS Steel Asia a joint venture between

the Philippines largest steel makers –Steel Asia manufacturing Co and China’s HBIS Group which plans

an 8 million ton per year intergrated work in Misamis Oriental in the southern Philippines with stage

1 to be completed by 2023.

➢ If all the new steel capacity is added as planned ,Yeoh estimated that at the present rate of growth in

steel consumption across the ASEAN region ,steel consumption will catch up the potential installed

capacity between 18.6 and 20.1 years adding that his new capacity forecast does not factor in the

addition of new electric arc furnace based steel projects set for the region.

➢ In 2018 ASEAN 6 steel consumption totalled 80 million tonnes up by 5% on year while the domestic

production amounted to 43 Million tonnes and their steel making capacity utilization only reached

57.6 % for 2018 according to SEASI statistics.

➢ The steel demand growth rate in 2019 is predicted to be around 4% year on Year based.

Source:Steel Mint Research 12

➢ Japan, world’s third largest crude steel producer witnessed stability in exports of ferrous scrap , while

exports semi finished and finish long & flat steel observed a slight decrease on a monthly basis in Oct

2019.

➢ According to World steel association ,Japan’s crude output remained stable in October 2019 and

stood at 8.16 MT as compared to 8.05 MT in September 2019 while on yearly basis the production

market slight decreased by 5%Y-o-Y as against 8.56 MT in Oct 2018.

Trend of Japan Steel Exports

Source:Coal Mint Research 13

Australian Coking Coal Price

DOMESTIC STEEL DEVELOPMENTS

14

Source: JPC MIS Report-OCTOBER 2019 15

Indian Steel Scenario

Items

Indian Steel Scene (Million Tons)

April-Oct.

18-19 (Prov.)

April-Oct.

17-18 (Final)

% Change

(Prov.)

Crude Steel

Production64.25 63.31 1.5

Hot Metal Production42.54 42.23 0.7

Pig Iron Production3.426 3.684 -7.0

Total Finished Steel ( Alloy + Non Alloy)

Production 59.72 57.86 3.2

Import 4.648 4.680 -0.7

Export 4.886 3.826 27.7

Consumption 59.050 56.823 3.9

Source: JPC MIS Report-OCTOBER 2019 16

Trend of Finished Steel of India

➢ Production: Led by Non-flat steel (53% share; up by 7.3%) while the rest 47% was the share of

Flat steel (down by 1.0%).

➢ Import: Flat products accounted for 89% share (up by 4.5%), the rest was the share of non-

flats (down by 30.2%).

➢ Export: Flat products accounted for 89% share (up by 32%), the rest was the share of non-

flats (up by 2.1%).

➢ Consumption: Led by Non-flat steel (52% share; up by 7.4%) while the rest 48% was the share

of Flat steel (up by 0.3%).

➢ At 59.05 mt, consumption of total finished steel grew by 3.9% in April-October 2019.

➢ Contribution of the non-alloy steel segment stood at 55.075 mt (93% share, up by 5.5%),

while the rest was the contribution of the alloy steel segment (including stainless steel).

➢ In the non-alloy, non-flat segment, in volume terms, major contributor to consumption of

total finished steel was Bars & Rods (23.663 mt, up by 11%) while growth in the non-alloy, flat

segment was led by HRC (23.693 mt, up by 0.2%) during this period.

Source:Steel Mint 17

➢ Finish long steel Imports in India is registered at 17,700 tons in October 2019 which is more

or less firm as compared to 17,811 tons in September 2019,Imports plunged by 38.26 % in

October 2019 as against 28,671 tons in October 2018.

➢ Factors could have contributed towards stable imports is limited demand in the Indian

domestic market and the price range was continuous on a downward in finish steel , this in

turn maintained figures of finish long steel imports.

Country wise imports➢ China stood top exporter

of finished long steel to

India and on a monthly basis

export increased by 7.5% to

4,283 tons in Oct’19 against

3,985 tons in Sep’19

followed by South Korea

4,203 tons in Oct’19

(-0.96%) against 4,244 tons

in Sept’19 and Malaysia

3,423 tons in Oct’19

(+2.5%) as against 3,339

tons in Sept 19

Trend of Steel Imports

Source: Steel Mint 18

➢ India’s major steel producer have raised flat steel prices by INR 1000-1250 per ton (USD 14-

18) for Dec deliveries owing to better demand , high export prices and improved buying

activities in the domestic market. Prior this, major steel companies raised HRC prices by

around INR 500-1000 per ton in Nov’19.

➢ After increase, company’s effective prices for HRC (2.5-8 mm, IS 2062) is hovering around

INR 35,500-35-750 per ton (ex-Mumbai) and CRC prices (0.9 mm, IS 513 GR) stood around

INR 39,500-40,000 per ton (ex-Mumbai).

Trend of Domestic Steel Prices

INDIAN ECONOMIC DEVELOPMENT

19

Source:Ministry of Statiscs and Programme Implementation (MOSPI) 20

➢ The Gross Domestic Product continued its downward

spiral for the seventh consecutive quarter, falling to 4.5

per cent in the second quarter (July-September) of the

year 2019-20. This is a fall of 0.5 per cent points

compared to the last quarter. Compared to the second

quarter of the year 2018-19, it is a fall of 2.6 per cent

points. In the second quarter of the previous year, the

GDP growth stood at 7.1 per cent.

➢ The GDP numbers were released along with the data for

the eight core infrastructure industries, which showed

output declining by 5.8 per cent in October. As many as

six of eight core industries saw a contraction in output in

October. Coal was the worst hit, declining steeply by 17.6

per cent.

➢ The GDP numbers for the July-September quarter today

come after six consecutive quarters of falling GDP

growth rate. The GDP growth rate for the first quarter of

2019-20 settled at 5 per cent, a six-year low. The

slowdown in economic growth has taken away from India

the tag of world's fastest growing major economy to

China. India's growth rates in the Q4 2018-19 and Q1

2019-20 were slower than that of China, which is a much

bigger economy.

Indian Economic Outlook

2019

Source: Reserve Bank of India

CurrencyDate

29th Nov 2019

I USD 71.72

1 EUR 78.97

1 GBP 92.66

100 YEN 65.51

Base Rate : 8.95-9.40%

Savings Deposit Rate : 3.25-3.50%

MCLR (Overnight) : 7.65-8.10%

Term Deposit Rate > 1 year : 6.25-6.60%

Policy Repo Rate : 5.15 %

Reverse Repo Rate : 4.90 %

Marginal Standing Facility Rate : 5.40 %

Bank Rate : 5.40 %

CRR : 4 %

SLR : 18.50%

Reference Rates

Lending/ Deposit Rates

Reserve RatiosPolicy Rates

Rates at Reserve Bank of India

2019

21

ABOUT ISA

22

About ISA

➢ The Indian Steel Association (ISA) is the voice of the Indian Steel Industry, in

both domestic and global forums. It is at the forefront of all deliberations

pertaining to matters of public & regulatory policy, raw materials, international

trade, logistics, environmental concerns, technology and other aspects of steel-

making. The Indian Steel Industry looks at ISA to further its critical agenda of

sustained growth, both in steel production and in generating domestic demand.

➢ ISA was formed in 2014 and has 15 members – eight full members and seven

affiliates. The list of full members includes –Steel Authority of India (SAIL) and

Rashtriya Ispat Nigam Ltd (RINL) – while heavyweights from the private sector

include JSW Steel Ltd, Tata Steel Ltd, Jindal Steel and Power Ltd, Essar Steel

India Ltd, Bhushan Power and Steel Ltd and Tata Steel BSL Ltd. ISA, an affiliate

member of World Steel Association (WSA), regularly collaborates with WSA on

the organisation of events, as well as taking part in other key meetings with

global partners.

23

Our Seven Full Members are:

• Tata Steel Ltd

• Steel Authority of India Ltd.

• JSW Steel Ltd.

• Rashtriya Ispat Nigam Ltd.

• Essar Steel Ltd.

• Jindal Steel & Power Ltd.

• Tata Steel BSL Ltd.

Our ten Affiliate Members are

Monnet Ispat & Energy Ltd., INSDAG

(Institute for Steel Development and

Growth), KISMA (Karnataka Iron and

Steel Manufacturer’s Association),

Arjas Steel, Jindal Stainless, Electro

steel Steels ,Shyam steel ,

Shyam Metalics ,Tata Steel Long

Products Limited and Orissa Metalliks

Pvt. Ltd

Members of Indian Steel Association

24(Orissa Metalliks Pvt. Ltd.)

Vision and Objectives of ISA

➢Vision of ISA-

To work towards transforming the Indian Steel Industry as a

global leader acclaimed for its Quality, Productivity and

Competitiveness, with a focus on health, safety and

environment, along with a growing thrust on innovation through

R&D, adopting an inclusive and collective approach.

➢ Objectives of ISA-

▪ Promoting steel by raising awareness about the numerous

advantages of good quality steel

▪ Collaborating with international steel organizations to

tackle issues of mutual interest.

▪Working with the government on matters affecting the

steel industry.

25

Important Ministries/Department/Organization

Ministry of Steel

Name of the person Designation Contact Details

Shri Binoy Kumar Secretary secy-steel@nic.in

Shri Saraswati Prasad Special Secretary & Financial Adviser asfasteel@nic.in

Smt. Rasika Chaube Additional Secretary rasikachaube@nic.in

Smt. Ruchika Chaudhry Govil Joint Secretary ruchika.govil@nic.in

Shri Puneet kansal Joint Secretary js1-steel@gov.in

Ministry of Mines

Name of the person Designation Contact Details

Shri Anil Gopishankar Mukim Secretary secy-mines@nic.in

Dr. K. Rajeswara Rao Additional secretary as_mines@nic.in

Ministry of Commerce

Name of the person Designation Contact Details

Shri Anup Wadhawan Secretary csoffice@nic.in

Shri Shudhanshu Pandey Additional Secretary astpd-doc@nic.in

Shri Alok Vardhan Chaturvedi DGFT dgft@nic.in

Dr. K.C.Rout Additional Secretary-DGFT kcrout@nic.in

Ministry of Environment, Forest and Climate Change

Name of the person Designation Contact Details

Shri C K Mishra Secretary secy-moef@nic.in

Control Pollution Central Board

Name of the person Designation Contact Details

Shri S.P. Singh Parihar Chairman ccb.cpcb@nic.in

Dr. Prashant Gargava Member Secretary mscb.cpcb@nic.in

Ministry of FinanceName of the person Designation Contact Details

Shri Rajiv Kumar Joint Secretary rajeevkumar@nic.in

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Contact Us for data related issues

Address:207-208, 2nd Floor

Kailash Building

New Delhi -110-001

India

Tel: +011 4266 8811

Fax: +011 4266 8805

E-mail: a.kashyap@indsteel.org

Website: http://indsteel.org/27

THANK YOU

DISCLAIMER

The material in this presentation has been prepared by Indian Steel Association (ISA) and is a general background information reviewing the

status of the developments in the global and Indian steel industry as at the date of this presentation. This presentation is strictly for internal use

of all the member companies of ISA, whose names have been stated in the presentation.

Information is given in summary form and does not purport to be complete or all inclusive. The information has been sourced from independent

third party databases, knowledge sources and news reports, and the authenticity of the same has not been independently verified by ISA.

Additionally, any third party forecasts on financial or economic parameters, projections or estimates should not be construed as an investment

advice or a recommendation to any ISA member. Recipients of this presentation from member companies of the ISA should each make their own

evaluation of the contents and adequacy of the information contained in the presentation.

ISA does not undertake any obligation to publicly release any changes to any revisions, modifications or forward looking statements in the

subsequent editions of this bi-monthly presentation. Unless otherwise specified, all information is for the period October 2019 or prior.

28