STEEL SECTOR

• Steel is an alloy of iron and carbon that is widely used in construction and other applications because of its high tensile strength and low cost.

• The steel industry is often considered an indicator of economic progress, because of the critical role played by steel in infrastructural and overall economic development.

Growth of steel industry

SCENARIO OF STEEL

• Global Scenario -

• In 2013 the world crude steel production reached 1606 million tons (mt) and showed a growth of 3% over 2012. (Source: World Steel Association or WSA)

• China remained the world’s largest crude steel producer in 2013 (779 mt) followed by Japan (111 mt), the USA (87 mt) and India (81 mt) at the 4th position.

• Per capita finished steel consumption in 2013 is estimated at 225 kg for world and 515 kg for China. 

Cont.

• Domestic Scenario –

• The Indian steel industry has entered into a new development stage from 2007-08, riding high on the resurgent economy and rising demand for steel.

• Rapid rise in production has resulted in India becoming the 4th largest producer of crude steel and the largest producer of sponge iron or DRI in the world.

Imports & Exports

2009-10 2010-11 2011-12 2012-13 2013-140123456789

7.38 6.66 6.867.93

5.45

Total Finished Steel (alloy + non alloy)

Imports (in million tons)

Cont…

2009-10 2010-11 2011-12 2012-13 2013-140

1

2

3

4

5

6

7

3.253.64

4.59

5.375.98

Total Finished Steel (alloy + non alloy)

Exports (in million tons)

SWOT Analysis of steel sectorSTRENGTHS

• Abundant resources of iron ore• Low cost and efficient labour force• Strong managerial capability• Strongly globalised industry and emerging global competitiveness• Modern new plants & modernised old plants

WEAKNESSES

• High cost of energy• Higher duties and taxes• Infrastructure• Quality of coking coal• Slow statutory clearances for development of mines

Cont…

OPPORTUNITIES

• Huge Infrastructure demand• Rapid urbanization • Increasing demand for consumer durables• Untapped rural demand• Increasing interest of foreign steel producers in India

THREATS

• Slow growth in infrastructure development • Market fluctuations and China’s export possibilities• Global economic slow down

Steel Sector in INDIA - PEST Analysis

PESTPolitical

Economic

Technological

Environmental

Major Problems faced by Steel Industry

Problems

Capital

Lack of Technology

Low Productivity

Low utilization

Shortage of coal

Inferior products

Top 10 Players in Steel Sector

• ArcelorMittal• Nippon Steel• Baosteel Group• POSCO• Hebei Steel Group • Wuhan Steel Group• Tata Steel• JiangsuShagang Group• U.S. Steel

STEEL SECTOR TRENDS

• India - world’s largest producer of direct reduced iron (DRI) or

sponge iron with nearly 20 million tonnes production in 2008-

09.

• Estimated steel production capacity -124 million tonnes by

the year 2011-12.

• Generate additional employment of around 4 million by 2020

for production of around 295 million tonnes of crude steel by

2019-2020.