STEEL INDUSTRY

Introduction of steel:

• Steel was first made by cementation, a process of heating bars of iron with charcoal in a closed furnace

• Steel is an alloy of iron, carbon, and small proportions of other elements.• Iron contains impurities in the form of silicon, phosphorus, sulfur, and

manganese; steelmaking involves the removal of these impurities, known as slag, and the addition of desirable alloying elements

• Steel was known in antiquity, and may have been produced by managing bloomeries, or iron-smelting facilities, in which the bloom contained carbon

• In 1866 by Sir William Siemens, uses iron ore and pig iron to produce steel

• Steel is classified by its carbon content: High carbon steel, Low or medium carbon steel, Alloy steel, Aluminum steel, Chromium steel, Nickel steel, Nickel chromium steel and Stainless steel

Steel Industry in India:• India is the largest producer of sponge iron and fourth largest producer of

steel in the world• India registered a 5.7% growth in crude steel production in 2011• Steel-making company based in New Delhi, India and one of the top

steel makers in World. With a turnover of 486.81 billion (US$7.4 billion)• It is a public sector undertaking which trades publicly in the market is

largely owned by Government of India and acts like an operating company

• Given the uncertainty in the global economy, export growth seen in the recent months may not be sustainable

• Steel exports increased by 12.7% in April-June period of 2013 mainly because of a depreciating rupee and export incentives

• With a capacity of about 15 million tones estimated to come up in FY'14, which is equal to almost 16% of the domestic capacity at the end of FY'13

• India, growth in apparent steel use is expected to grow by 6.9% in 2012 and by 9.4% in 2013

Export contribution of Steel:

• In India steel exports began only in the year 1964• Iron and Steel are freely exportable• Duty Entitlement Passbook Scheme (DEPB) was introduced to facilitate

exports• For the first time, steel exports from India have crossed the million tones

mark in three months in 2013• Tata Steel exported 240,000 tones of steel in 2012-13, more than three

times of 70,000 tones exported in the previous year.• SAIL, exports of steel materials stood at 368,000 tones in the just

concluded fiscal year, up over 11% from the preceding year’s 334,000 tones

• At JSW Steel Ltd, the norm is to export 20% of production had an output of 7.815 mt in 2011-12.

• Since all steel mills are expanding capacity, exports are expected to rise.

2009-10 2010-11 2011-120

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Indian steel industry Exports in million ton

Current Scenario:

• The World Steel Association (WSA) has predicted a growth of 5% consumption of steel in India

• The domestic steel demand is expected around 5.5%• Domestic steel companies are increasingly targeting a substantial chunk

of their production for exports • While the rupee fall and slow demand at home is acting as an immediate

trigger, a more compelling reason for exports could be to find alternative markets

• India is expected to be the world's second largest producer of steel by 2014

• The demand for steel is expected to rise 7% by 2014

Market size:

• India's steel production increased by 0.9% to 6.45 million ton (mt) in June 2013, as against 6.39 mt in June 2012

• India fared better than rest of the world in terms of average output for the first six months of 2013

• India’s steel production grew by 2.5% to 39.63 mt in the six month period January-June 2013 as against 38.68 mt in the same period in 2012.

• During the same period, world crude steel production was 789.8 mt, recording an increase of 2%

Category of steel:

• Carbon Steels- contain trace amounts of alloying elements and account for 90% of total steel production– Low Carbon Steels/Mild Steels contain up to 0.3% carbon– Medium Carbon Steels contain 0.3 – 0.6% carbon– High Carbon Steels contain more than 0.6% carbon

• Alloy Steels- contain alloying elements (e.g. manganese, silicon, nickel, titanium, copper, chromium and aluminum)

• Stainless Steels- contain between 10-20% chromium

 • Tool Steels- contain tungsten, molybdenum, cobalt and vanadium in

varying quantities

Major steel producing countries 2012:• China (716.5mt)• Japan (107.2mt)• United States (88.7mt)• India (77.6mt)• Russia (70.4mt)

Major Exporter of steel according to 2012:• China (54.8mt)• European Union (47.1mt)• Japan (41.5mt)• Russia (26.7mt)• India 17th place (8.2mt)

Major Importer of steel according to 2012:

• United States (31.5mt)• European Union (29.5mt)• Germany (22.9mt)• South Korea (20.4mt)• India 13th place (9.3mt)

List of Top Steel Companies in India:

• TATA steel (20%) - Mumbai• SAIL (10%)- New Delhi• JSW steel (8%)- Mumbai• Visa steel (5%)- Jaipur• Bhushan steel (3%)- New Delhi

China Japan US India Russia South Korea

Ukraine Brazil ROW0

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Market share of steel by countries in 2012

Ministry of Steel:

• The Ministry of Steel is under the overall charge of the Hon'ble Minister of Steel

• This has direct control and supervision on the country’s total steel producing companies in India

• Mr. Beni Prasad Verma serves as the Minister of Steel Industry• All the exports and import transactions are controlled by the ministry• The ministry holds the responsibility for framing policies and regulation

norms with regard to the sector in India• The ministry effectively contributes its service through administration and

designing financial propaganda supporting steel and iron ore production inside the country

Incentives to the steel industry:

• In union budget 2012-13 as well as in 12th five year plan draft, government had took lot of steps towards the infrastructure sector

• In FY13 budget custom duty has reduced to 2.5% from 7.5% on plant and machinery

• Other steps taken by the government are 100% FDI allowed through the automatic route in the sector

• Large infrastructure projects in Public-Private partnership mode are being formed

• Basic Custom Duty (BCD) on stainless steel flat products may be increased from the existing level of 5% to 15%

Ministry of Steel’s promotion of R&D:

Ministry of Steel is encouraging Research and Development activities both in public and private steel sectors by providing financial assistance under the following two schemes:

•  R&D with Steel Development Fund (SDF)

Year-wise release of SDF fund during the last 5 years is given below:

 

2007-08 10.12 cr

2008-09 7.27 cr

2009-10 11.26 cr

2010-11 20.65 cr

2011-12 3.01 cr

2012-13 (up to Sep’2012) 7.37 cr

R&D with Government Budgetary Support (GBS):

Year-wise release of fund is as follows:

2009-10 4.14 cr

2010-11 27.05 cr

2011-12 9.63 cr

2012-13 (up to Sep’2012) 11.97 cr

Packing methods of steel:

• Packing involves color coding of each bar to client’s specification• Each bar bears a sticker detailing grade seal of the inspector• Non metallic spacer rings or collars placed on each bar• Steel is wrapped with HDPE foam/film before being inserted into cartons

and boxes• Each bar/rod is wrapped in multiple layers and packed in wooden boxes

Distribution process:

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