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GROWTH OUTLOOK OF STEEL CONSUMING SECTORS IN THE NEXT DECADE

GROWTH OUTLOOK OF STEEL CONSUMING SECTORS IN THE NEXT DECADE. Indian Steel Market Conference : 2018. Swissotel Hotel, Kolkata June 07, 2018. Sushim Banerjee , Director General. Institute for Steel Development & Growth (INSDAG). Economic Performance of India. Source : CSO, EA, RBI.

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GROWTH OUTLOOK OF STEEL CONSUMING SECTORS IN THE NEXT DECADE

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  1. GROWTH OUTLOOK OF STEEL CONSUMING SECTORS IN THE NEXT DECADE Indian Steel Market Conference : 2018 Swissotel Hotel, Kolkata June 07, 2018 SushimBanerjee, Director General Institute for Steel Development & Growth (INSDAG)

  2. Economic Performance of India Source : CSO, EA, RBI

  3. Economic Performance of India Areas of Concern Source : RBI, CSO

  4. Global Economic Outlook Latest GDP Forecasts • India would be Asia’s fastest growing large economy in 2018-22, expanding at an average amount rate of 7.9% Economist :-

  5. Parametric Connectivity of Steel Industry • Steel GDP elasticity during 1992-93 to 2011-12 at 1.1 weakened in subsequent years • Steel GDP elasticity during 2011-12 to 2017-18 (new series) at 0.62. • Growth in Steel Demand is likely to be lower than GDP growth due to emergence of lighter but stronger steel and impact of recycling, reuse and remanufacturing practices and partially by substitution.

  6. Tardy Growth of Steel Intensity • Steel Intensity in Construction (steel-cement ratio) increased from 0.262 in 1999-00 to 0.303 in 2017-18, but much lower than 1/1.2 in other countries • Secular decline of GFCF as % of GDP • Gross Fixed Capital Formation (at current prices, proxy for investment) improved to 29.1 percent of GDP in Q4 with an average of 28.5 percent for the year. However, Capex shortfall by 11 States worrying factor. • GDP growth in Q4 of FY ‘18 at 7.7 percent encouraging • Value addition in Manufacturing and Construction Sector grew at 9.1 percent and 11.5 percent during Q4 of FY’18.

  7. Steel Intensity in Economic Growth • Investment in physical infrastructure building has an average 7 times more steel intensity than investment in social sectors (health, education, family welfare) • India’s average investment in physical infrastructure stands at 6-7 percent of GDP as against 14-15 percent of GDP in China.

  8. Sectoral Model Projection of Steel Demand for 2030-31 Source : Industry Note: The estimated demand (conservative estimates) indicates CAGR rate of 6.2 percent and optimistic demand estimates put CAGR rate of 8.3 per cent during Fy 18 to Fy 31

  9. Steel Demand Trend – Global and India • Global Steel Demand to reach 1616 million t in 2018 @ 1.8% over 2017. • Favourable global economic momentum – trade tensions a growing risk factor. • Chinese demand to stay flat, US outlook remains robust due to strong competition and investment. • India’s steel demand to be driven by public investment. Steel Weighted Index Approach: WSA In Million t

  10. Growth Drivers – Sectoral Push • Mega investment projects : • Sagarmala – 570 projects worth of Rs.8,00,000 Cr. ($ 118.5 bn) identified in port modernization, connectivity enhancement, port-linked industrialization and costal connectivity development. Award of projects of Rs.70000 Cr. ($ 10.4 bn) likely in 2018-19. • Port led development identifies steel – shipbuilding – automotive cluster in line with S Korea • Steel tubular piles, steel superstructure, steel sheet piles, offshore / onshore structures, floating docks, under carriage & ship haulage structures needed.

  11. Growth Drivers – Sectoral Push Defence : • Defence Production Policy 2018 places India among the top 5 countries in Aerospace and Defence Industries. • Currently 60 percent of defence needs imported steel – to become self-reliant by 2025. • Identifies 13 sets of weapon systems including fighters, helicopters, warships tanks for indigenization of development and manufacturing by 2025 • Huge opportunities for MSME units • One submarine requires 10000 t of steel plate, one aircraft carrier requires 50000 t of plates • Each light armored vehicle requires 8 t steel while each tank requires 22 t of steel.

  12. Railways • Total requirement of construction steel (Plates, Structurals, Rebars, Rails) 3.5 – 4.0 MT in next 2 years (including 25000 t of Head Hardened Rails) • Total investment Planned for Railways (including World Bank aid for DFC) Rs.8560.2 bn ($ 126.82 bn) • High Speed Rails (energy efficient) for Mumbai-Ahmedabad route commenced. Manufacturing of 240 coaches by BHEL / BEML for High Speed Trains in association with Kawasaki and Hitachi. • Metro Rail : Ahmedabad, Pune, Nagpur, Lucknow, Some Rails including HH Rails imported which are tied with Aid. 47 percent of Metro Coaches manufactured by BEML

  13. Bharatmala Pariyojana (BMP) • Phase 1 of Bharatmala Project – 24800 Km plus 10000 KM of balance roads under NHDP for total 34800 Km road development @ Rs.5,35,000 Crores ($ 79.3 bn) by 2022 to include Economic Corridor (9000 Km), Feeder route (6000 Km), National Corridor (5000 Km), Border roads (2000 Km), Port Connectivity (2000 Km) and Expressways (800 Km) • Connects 550 districts through NH linkages • Improves connectivity in NE & Leveraging synergies with Inland Water Ways • Seamless connectivity with Bangladesh, Bhutan, Nepal, Myanmar & Thailand • 44 economic corridors to connect border areas and improve port and coastal connectivity Affordable Housings • 1.88 crores houses to be built under Affordable Housing Scheme in next 2 years. House construction in 2018-19 having maximum thrusts. • Steel-Concrete Composite structures for G + 3 building • For > G+3 building, steel cheaper than RCC on LCA consideration

  14. Civil Aviation • Total outlay of Rs.1 lakh cr ($ 14.81 bn) by Airport Infrastructure sector for creating new terminals, development of greenfield airports and private investment in airport development by JV • Rs.20178 Crores ($ 3 bn) for infrastructure development in 22 airports in next 4-5 years (Chennai, Guwahati, Lucknow, Jaipur, Pune, Srinagar, Leh, Goa, etc.) • Upgradation and expansion at Delhi, Hyderabad, Bengaluru @ Rs.25000 Crores ($ 3.7 bn) in next 5 years.

  15. Automobile • Auto Sector grows by around 15 percent in 2017-18. • India has become Auto manufacturing hub – Maruti, Hyundai, Tata Motors, M&M, Ford, GM, Toyota, Nissan setting up facilities and augmenting capacities. • Fuel efficiency and rigid safety norms to stimulate R&D efforts for higher use of light gauge steel, coated steel in Body-in-White and AHSS/UHSS products.

  16. Emerging Business Opportunities • Pre-Fabricated Structures : Fabrication of predesigned and standardized designs – may not be customized or re-engineered for each application • Pre-Engineered Buildings : Designed and customized for specific projects and engineered for specific requirements. • Faster Construction: Use of pre-engineered components to lead to reduction of engineering, manufacturing and erection time. • Primary Structural Framing requires I sections • Secondary framing (roof purlins) requires Z & C sections • Roll formed profiled sheets used as roof & wall panels • IS – 801 to increase use of cold formed sections

  17. Construction Solutions • Integration of downstream products in steel application • Cut & Bend • Welded Mesh • Cold formed steel (Light gauge steel) • Steel made Machinery and Equipment • Service Centres for customized products

  18. Steel Crash Barriers Steel Requirement • 3.0 mm thkGalvanised steel sheet • MC Sections as posts / spacer blocks • Tonnage – 55 mt per km (considering only road side use & double head) • Additionally steel railing / fencing of tubular sections may be used as guard rails along highways and in busy commercial / institutional area to match urban environment and aesthetics. Types of Crash Barriers W–beam type steel barriers Thrie–beam type steel barriers

  19. Guard Rails / Crash Barriers in Hilly Terrain Safety of vehicles can only be ensured with strong steel structures – This is essential to comply with judicial directions in place.

  20. Road Furnitures in Steel – few pictures (Contd …..)

  21. Pedestrian Crossing – few pictures (Contd…)

  22. ADVANTAGES IN USE OF STEEL • Steel is preferred due to the following advantages: • Lighter Construction • Faster Construction • Corrosion Resistance • Better Thermal Insulation • Sustainability & Green Technology • Cost efficient • Higher Carpet Area • Higher Wind Resistance • Higher Seismic Performance • Least disruption to Public at Site • IS & National Building Code Compliant • Steel-Concrete Composite blends the strength of concrete under compression and strength of steel in Tension.

  23. Thrust on Product Development • Emerging demand requires existing profiles with additional features and value added steel • Alternatives like Aluminium, Magnesium, Carbon Fibre Reinforced Plastics (CFRP) pose challenges to steel • Combining the following Product Development technologies:- • Alloying Elements • Thermo Mechanical Treatment • Heat Treatment • Coating and Fire resistant • Usage of Nanotechnology • A few products having potential demand includes Ultra High Strength (UHSS) with Tensile strengths of around 1500-2000 Mega Pascal developed. • High strength Steel for lighter wagons (33% weight reduction) and Fire Resistant weldable grade steel for Construction sector • Higher grades of general construction steel like E 410 / E 450 for heavily loaded structures.

  24. New Grades • High Tensile (UTS>1260 Mpa), high strength 110 UTS Rails, high fracture toughness corrosion resistant Rails, HH Rails • High strength abrasion-resistant Plates in Q&T condition for Bridges, Dams, ATM, Chests, Earth Movers (Demand: 60000t / year) • High Strength Plates with low temperature impact toughness property (YS:700 MPa, UTS:>= 940 Mpa) for Bullet proof vehicles, Watch Towers, Security Posts (Demand: 40000t/year). • Use of SAIL steel of DMR 249 A&B grades in first indigenous Aircraft Carrier INS Vikrant. Development of DMR 292 grade for Submarine construction with 30 per cent higher strength than DMR 249 A.

  25. New Grades 8. Auto Sectors • CR sheets / coils : EDD / Interstital Free (IF) / Bake hardening / Dual phase for door panels, HSS / AHSS upto 980 Mpa and galvanized upto 590 Mpadeveloped for Auto. 9. Wind Mills (Wind Turbine) • Required grades = EN 10025 S355 JR/JO/J2/K2, EN 10025 460 NL/ML, EN 10025 690 QL 10. Oil and Gas • API X – 70 / X – 80 / 100 / Plates for pipe line transportation at high operating pressures 11. Power • CRGO steel (M3/M4, estimated demand:0.5-0.8 MT/year) • High grades CRNO (M 27 and above)

  26. WSA : Regional Study of Steel Demand • High Strength demand potential in Gujarat, Haryana, Rajasthan and Tamil Nadu • Infrastructure would be a pan India steel demand driven • Strong manufacturing potential shown in Uttarakhand, Maharashtra, Gujarat, Chattisgarh, Odisha.

  27. Steel Uses in Rural Development Building houses – Low cost houses Durable Sanitation system Building Rural roads Irrigation System : Building canals from nearby rivers Construction of Schools /Colleges Construction of Hospitals Community Halls Anganwadi – Primary Health centres Cycle / Motorcycle Sheds Storage Bins Mechanized farming Conversion of thatch / tile / asbestos roofing to GC Sheets

  28. Rural Steel Consumption • A study on rural steel consumption by JPC shows : • Current Rural Steel Consumption – 16.90 Kg per capita. Source: JPC study

  29. INSDAG Efforts to Augment Rural Steel Consumption Skill Training for Masons and Fabricators • Training Module for Local Engineers / Masons about Good Construction practices using TMT, earthquake resistant detailing, good safety practices during cutting, bending binding, storage, etc., common best practices, issues on Rusting & Corrosion. • Till date about 2611 local engineers / masons have been trained by INSDAG jointly with SAIL, TATA Steel, RINL.

  30. INSDAG Efforts to Augment Rural Steel Consumption Cluster Development on Steel Fabrication • INSDAG has been assigned by Deptt. of Micro & Small Scale Enterprises & Textiles, Govt of West Bengal to develop Common Facility Centre (CFC) in 6 Districts of West Bengal (Coochbehar, Darjeeling, Siliguri, Maldah, Paschim Medinipur & Purba Medinipur). • 30 more CFCs are identified for further development.

  31. FarmMechanisation • Farm mechanization with steel offers cost effective solution to enhance productivity and output • Some of the latest machines popular in farm use are : • Power tillers • Paddy thrasher (Pedal operated) • Paddy transplantation (Manual)

  32. LOW COST HOUSE Designed by INSDAG Installed at NIRD, Hyderabad

  33. hankou!

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