2. Overview:
• India ranks 5th in the world ranking for production of steel
and fourth largest producer of crude steel in 2011-12 with
89 million tonnes (MT).
• India produced 66.8 million tonnes in 2010-11in comparison
to China’s 626.7 million tonnes.
• About 50% of the steel produced in India is exported.
• India accounts for over 7% of the total steel produced
globally.
• India accounts for around 5 per cent of the global steel
consumption.
• The total employment in the industry is more than 2 million
(including direct and indirect employment).
3. Players in the Industry:
• Tata Steel: wire rods, bars, and steel flats.
• Jindal Steel & Power: mild steel slabs
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and sponge iron.
JSW Steel: gamut of steel products .
Essar Steel: sponge iron, steel and
iron ore pellets.
Rashtriya Ispat Nigam Ltd: liquid steel.
Bhushan Power & Steel Ltd: iron Ore
Beneficiation.
Lloyds Steel: corrugated sheets and
steel coils.
Steel Authority of India Limited: steel
and iron.
4. Reasons for Growth of the Indian
Steel Industry:
• 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.
Development enhancing facilities:
• Huge Infrastructure demand.
• Rapid urbanisation.
• Increasing demand for consumer durables.
• Untapped rural demand.
• Increasing interest of foreign steel producers in India.
5. PEST Analysis of Indian Steel
Industry:
Political Factors:
•Recommendations on Captive Mines.
•National Steel Policy to Remove Bottlenecks.
Economic Factors:
•GDP Growth Rate.
•Reduction in Customs Duty.
Social Factors:
•Rural-Urban Divide.
•Higher Disposable Income.
Technological Factors:
•Popularity of Steel Portals.
•Application of SML (Steel Markup Language).
6. Michael Porter’s Five Forces
Analysis
Buyers’ Power:
•Increasing Demand for Steel.
•Fragmented Coke Suppliers.
Suppliers’ Power:
•High Raw Material Prices.
•Lack of Transportation.
Intensity of Competition:
•Competition from Foreign Players.
•Spurt in Merger and Acquisition
Activities.
Threat of New Entrants:
•High Cost of Basic Inputs and Services.
•Industry is Capital Intensive.
Threat of Substitutes:
•Use of Aluminium, Plastic, Carbon Fibre.
7. Challenges faced by the Indian Steel
Industry:
• High cost of energy.
• Higher duties and taxes.
• Quality of coking coal.
• Dependence on imports for steel manufacturing
equipments & technology.
Global Impact on the Indian Steel Industry:
• Slow growth in infrastructure development.
• Market fluctuations and China’s export possibilities.
• Global economic slowdown.
8. Government Regulations:
• Emphasis on infrastructural development during the
formulation of the Union Budget 2011.
• Noteworthy reductions in import duties on key steelmaking raw materials.
• To ensure growth of Iron and Steel Sector in India,
Ministry of Steel takes up their issues with the other
concerned Ministries/ Departments such as:
Ministry of Coal for allocation of Coal Blocks and Coal
Linkages to Iron and Steel Industry.
Ministry of Petroleum & Natural Gas for supply of
Natural Gas to Iron and Steel Industry
9. Future Prospects for
Development:
Resources:
•Strong Managerial skills in Iron and Steel making.
•Large pool of skilled Man-power.
•Established steel players with strong skills in steel making.
•Abundant Iron Ore reserves.
Opportunities:
•High economic growth driven increasingly by industry.
•Faster Urbanisation.
•Increased Fixed Asset Building.
•Automobiles and component industry growth.