INDUSTRY PROFILE

India’s iron and steel industry is expanding because of the robust domestic and
international demand. India’s steel industry has gained international recognition because
of its fast economic expansion and rising demand from domestic and international
markets for goods like real estate, autos, and infrastructure. India is the world’s fourth-
largest steel production, according to the International Iron and Steel Institute’s (IISI)
most recent study. Around the world, the steel sector is booming. With each passing day,
competition in the steel industry grows. The world-wide development initiatives,
particularly the infrastructural improvements and real estate boom around recent
developing currents, were primarily responsible for the rising demand for it. OECD
(Organization for Economic Cooperation and Development) nations used to dominate the
steel market from the 1960s through the 1980s. The United States of America once
controlled the steel industry, but this situation is quickly changing as Indian steel
corporations go on an acquisition rampage. However, the rapid rise of developing nations
like China, India, and South Korea in this industry has resulted in a decline in the market
share of OECD nations. The trade balance is likewise shifting in favour of these nations.
With a strong financial position, the steel sector has seen enormous growth over the past
1.5 decades. The enterprises in this sector are operating at or close to their maximum
capacity due to the growing demand for steel from developing nations for their
infrastructure initiatives.

Processing of iron and steel

• Mining is the first step in production of iron and steel.

• Earth is excavated deep in search of iron ore.

• Breaking and cutting of iron ore are put in particularly hot fire lead in the embers of
fire.

STEEL INDUSTRY
The first integrated steel mill, Tata Iron & Steel Co (Tata Steel), was established in 1907,
giving the Indian iron and steel industry a history of almost a century. It was the first core
sector that was totally exempt from the licencing framework, as well as the pricing and
distribution regulations (in 1990–1991 and 1992–1992). Globally, the steel industry is
growing. It has benefited for several years from the unusually strong Asian economy
(mainly India and China). the rapid Increase in demand for steel is being driven by the
economic modernisation processes taking place in these nations.

By removing it from the list of sectors protected for the public sector and exempting it
from mandatory licencing requirements, the New Industrial strategy adopted by the
Government of India has freed up the iron and steel sector for private investment. Under
an automated route, Imports of foreign technology and foreign direct investment are
freely permitted up to specific limits. This has provided a clear push for the entry,
participation, and growth of the private sector in the steel sectors, together with other
government efforts.

While the current facilities are being updated and extended, numerous new greenfield
steel mills have also sprang up around the nation using cutting-edge, cost-effective
technologies.In order to become one of the largest steel plants in the state, the Korean
steel company POSCO is investing heavily in mines and steel plants in Orissa.

India’s capacity is anticipated to rise from 100 MT to around 112.5 MT in 2016, taking it
from fourth to second in the world’s production of steel and iron. India also set a 300 MT
steel production goal for 2025. These indications imply that India will overtake China as
the world’s second-largest producer and consumer of steel. India’s usage of stainless steel
in the last 15 years has increased significantly, from 6% globally to 14% in India.

GROWTH OF THE INDUSTRY

From just 28 million tonnes at the start of the 20th century to 781 million tonnes by its
conclusion, global steel production increased dramatically. One of the biggest producers
of steel in the world during the 20th century was Bethlehem Steel in Bethlehem,
Pennsylvania. Crude steel output has increased at an incredible rate during the 20th
century and is quickly approaching a threshold of 800 million tonnes annually.
Nowadays, it is challenging to envision a world without steel. Steel usage grew at an
average annual rate of 3.3% over the 20th century. 37% of the steel produced worldwide
in 1900 was produced in the USA. At the turn of the 20th century, Asia produced
approximately 40% of the world's industrial output thanks to post-war industrial progress,
with Europe (including the former Soviet Union) generating 36% and North America
creating 14.5%.

When economies are expanding, steel consumption rises as governments invest in

transportation and infrastructure and construct new homes, factories, and buildings. Steel
production declines because of these failed investments during an economic downturn.
The developing world is now the centre of attention after dominating the developed
world for more than a century. Steel is regarded to as a sunset industry in the West. In the
developing world, it is still early morning for most people. At the turn of the century,
growing nations like China, Brazil, and India, as well as newly industrialised South
Korea, saw increases in steel output. China's steel production and consumption increased
gradually in the early years, but eventually gained momentum and began to outpace the
rest of the globe by the end of the century. In 2003, China produced 220.1 million tonnes.
In 2004 and 2005, respectively, 272.2 and 349.36 million tonnes were produced. That is
much above the production in 2005 of Japan at 112.47 million tonnes, the USA at 93.90
million tonnes and Russia at 66.15 million tonnes. For details of country-wise steel
production see Steel production by country.

Growth potential of the industry

Among the other new steel-producing nations, Brazil and South Korea have stabilised at
roughly 30 million tonnes and 46–48 million tonnes, respectively. This shifts the
industry’s attention to India. For India to achieve its goal of becoming a developed
nation, it will need to increase its annual steel consumption from the current level of 300
kg per person to somewhere close to 300 million tonnes. The distance from the current
production level of roughly 50 million tonnes is undoubtedly great, but before estimating
its future potential, one must look at its past. Around a million tonnes of steel were being
produced in India at the time of its independence in 1947. When the economy was
opened in 1991, the production of steel increased to almost 14 million tonnes. Following
then, it doubled in the ensuing ten years, and now it is doing so again over what may be a
slightly longer time frame. By 2020, 275 million tonnes of steel are anticipated to be
produced in India, which might overtake China as the world’s second-largest producer the
tendency In industrialised nations is toward industry consolidation. There have been
numerous international mergers over the years. The emphasis is on new products and
technological advancements. In 2004, the steel industry reached a billion-tonne global
output. The amount by which it will expand will mostly rely on how much more steel is
consumed in the emerging world.

Global Scenario

• In 2011, global crude steel output increased by 6.8% over 2010 to 1527 million
tonnes(mt). (Source: World Steel Association; figures based on preliminary findings.)

• China continued to be the world’s top producer of crude steel in 2011, followed by
Japan (107.6 mt) and the USA (695,5 mt) (86.2 mt). India held down the fourth spot (72.2
mt) for a second year in a row. (Source: WSA; pending data).

• According to the WSA’s forecast, apparent steel utilisation would rise by 6.5% to 1,398
Mt in 2011 after rising by 15.1% in 2010. It has been predicted that the same willincrease
by 5.4% more in 2012. China and India will be the main drivers of this expansion, with
China’s apparent steel consumption predicted to rise by 7.5% and 6%, respectively, in
2011 and 2012. For India, growth in apparent steel use is anticipated to be muted in 2011
at 4.3%, but to pick up in 2012 by 7.9%.

• Per capita finished steel consumption is estimated at 206 kg for world, 427 kg for
China.

INDIAN STEEL INDUSTRY

 Due to numerous initiatives implemented by the Indian government, the steel industry
has been steadily expanding in India. The Indian steel industry has gained international
recognition thanks to the surge in demand from a variety of industries, including
infrastructure, real estate, and automobiles. The government’s 1991 economic reform
initiatives helped the steel industry expand. The public sector dominated the steel
industry before the reforms. However, following the changes, this industry was now
accessible to both domestic and foreign investment. Except for regions, the 1991 reforms
allowed for the elimination of licencing requirements for capacity creation. Due to
significant foreign investment and cutting-edge technology, numerous new steel factories
have been built throughout the nation. India’s first steel mill was Tata Steel, which
opened its doors in 1907. The Bhilai Steel Plant in Chhattisgarh, the Rourkela Steel Plant
in Orissa, and the Durgapur Steel Plant in West Bengal are just a few of the additional
steel plants in the nation. The World Steel Association classified India as the fourth
largest producer of steel in 2010. The importance of the steel sector to the nation’s
economic development cannot be overstated. By 2015–2016, India is anticipated to
overtake China as the world’s second-largest producer, with a production volume of 54.5
million tonnes (MT). The rate of steel consumption on the domestic market has a
significant impact on the expansion of the steel industry in India. Infrastructural
construction and dwellings need a lot of steel. The growth of India’s property market in
recent years has increased local demand for steel. The Indian steel industry offers more
than 3500 different types of steel.

1.2.6 MAJOR PLAYERS OF STEEL IN INDIA

Private sector

1) JSW Steels Ltd

2) TATA Steels Ltd

3) Jindal steel & Power Ltd. (JSPL)

4) Essar Steel Ltd.

5) Ispat industries Ltd.

Public sector

1) Hindustan Steelworks Construction Ltd. (HSCL)

2) Steel Authority of India Ltd. (SAIL)
3) Metal Scrap Trade Corporation Ltd. (MSTC)
4) Rashtriyalspat Nigam Ltd. (RINL)
5) Ferro Scrap Nigam Ltd. (FSNL)
6) Mecon Ltd.