PRESENTATION ON. GROWTH PERSPECTIVES OF INDIAN STEEL INDUSTRY. BY. Sushim Banerjee , Director General Institute for Steel Development & Growth, Kolkata. Indian Steel Conference 23-24 March 2012, New Delhi. World Growth pattern in 2005-2010.
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GROWTH PERSPECTIVES OF INDIAN STEEL INDUSTRY
Real GDP growth (%)
Source : IMF, World Economic Outlook Jan ‘12
WHY STEEL ?
WHY STEEL ?
Shift in Production Base : 2000 - 2011
Global Steel Capacity Utilization
WORLD TRADE IN STEEL PRODUCTS (Million Tons finished Steel)
Source: World Steel In Figures,2011
Source: WSA February 2012
Source:HRC: Russia Black Sea Export FOB($/T)
Source: Rebars: Turkey Export FOB($/T)
Source : SBB - India Iron Ore: China CFR; Coke: China; Export (FOB) Melting Scrap: East Asia Import HMS(80:20)
Global Economy projected to grow by 3.3 percent in 2012 after clocking 3.8 percent in 2011.
Subdued steel demand in EU, Japan and USA.
Restriction on real estate and restructuring of small scale polluting steel units and recent strategy of moderating GDP growth rate by China leads to a suppressed growth in steel demand. Would Surplus steel in China cause concern to India?
Marginal hike in Finished Long Steel prices following rise in scrap prices with less volatility in coal & iron ore prices – may dampen move for immediate price increase.
STRUCTURE OF INDIAN ECONOMY
(Source : CSO, Economic Outlook : 2011-12)
Source: CSO, Series for 1994-95 & 1995-96 on 1993-94 = 100
base and all others on 2004-05 = 100 base
Indian Steel Industry
(2000-01 to 2010-11)
Steel Consumption in India grew @ 8.9 percent annually in last decade against 4% annual growth in Global Steel Consumption
Transport of Petroleum/ Water
Power plant equipment
Each of these segments has good potential to grow
- Infrastructure : 54 percent
- Industrial Expansion : 36 percent
- Residential and Commercial : 10 percent
(at 2006-07 prices)
Infrastructure Investment to reach 7.1% of GDP in 11th Plan from 5.15% of GDP in 10th Plan
* Anticipated Investment in infrastructure in 11th Plan : Rs.1948069 Cr
Source : Planning Commission
Steel and Infrastructure
Source : MOC
DOMESTIC STEEL SCENARIO OF FINISHED STEEL
Around 1174 no. of IF units are working with a Working Capacity of 25.84 million tonnes
(*Based on a GDP elasticity of 1.14)
Constraining Factors in Steel Promotion
- Iron making : FINEX, HISMELT, COREX, ITBK-3, CDI
- Steel making : Thin slab casting, Thin strip processing
- Rolling mills : Secondary Refining, CRGO Steel, API X- 100, Bake Hardened Steel, AHSS, TRIP Steel
- Critical segments to be Partners in Progress in Product Development
- ULCOS (Ultra low Co2) steel making : Breakthrough Technology & Hydrogen based steel making to reduce Co2 emission (POSCO)