Indian Steel Industry â An Overview - OECD.org
02-Dec-2010
Indian Steel Industry – An Overview 69th OECD Steel Committee Meeting Paris 2-3 December 2010
1
02-Dec-2010
Indian Steel Demand – Buoyant 56.5
60
52.1
52.4
Steel CAGR in last 5 yrs was 9.4%
46.8
50
41.4 36.4
26.5
40
29.9
27.3
24.7 30
20.3
22.2
Longs Flats
20 10 0
14.1
17
19.6
23
2.1
2.2
2.5
2.7
21.9
23.4
3.2
3.1
Alloys
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
Steel consumption growth in last 5 yrs was range bound at 9-13%, Per capita steel use is 48 kg vis-a-vis 35 kg in 2005 Steel demand expected to continue @10%+ CAGR till 2020
Steel Demand Driver 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
9.5
9.7
9.0
8.2
7.0
9.0 7.3
7.6
8.0
8.1
GDP growth to continue at 8-9% Huge infrastructure investment by Govt. ~ $500 billion
2
02-Dec-2010
Indian Steel Demand on High Pedestal 165
Long-term GDP Growth
GDP @9%
148
target rate ~9%
140
133
113
GDP @8%
115
105 78
90
33
26
40
75
59 57
52
65
15
1999-00
• •
2003-04
2007-08
2009-10
2012-13
2016-17
2019-20
High GDP growth - support to steel demand Steel intensity to go up with more fixed asset investment
Indian Steel Demand – Likely Sources Sector-wise incremental steel demand by 2012 (million MT) 1
3
4
100 90 80 70 60 50 40 30 20 10 0
~100
5
30
12 20 AS U
ay s
ns .D ur ab le s Co
Ra ilw
ta lG oo ds Ca pi
Au
to m
ob
ile s
ns t ra /C o In f
AS U
20
08
52
Source: In-house
Private sector investment growing at 15% plus Large infrastructure projects in Public-Private Partnership (PPP) mode Foreign investment of nearly $40 billion committed in steel sector 6
3
02-Dec-2010
Domestic Steel Availability 59.7
India: Steel Production (million MT)
60.0
50.2
50.0
44.4
41.3
38.6
40.0
29.7 26.3
24.7
27.0
22.1
20.4
19.2
30.0
53.5
52.8
Longs
22.3
2004-05
2005-06
2006-07
26.5
30.0
2009-10
21.0
26.4
2008-09
19.4
2003-04
10.0
25.5
2007-08
20.0
Flats
0.0 Source: JPC
Steel consumption in Apr-Sep 2010 rose by 9.8% y-o-y Capacity augmentation to meet domestic demand 7
Indian Steel Capacity By 2020 2009 SAIL JSW
7.8
3.2
TATA
6.8
6.2
ESSAR
9.9
4.6
ISPAT
3.0 2.0
RINL
2.9 3.9
JSPL 2.4
2012
POSCO
32.0
21.0
20.5
6.0
17.0
12.0 9.2
16.0
8.1
16.1
26.5
9.0 12.0
(million MT)
30.0 6.5
22.0
10.0
7.0
Additional capacity by 2020 ~230-240 million MT
3.0
ARCELOR…
0.0
33.5
20.5
18.0
SECONDARY
60.0
35.2
BSPL 1.22.8 3.0 BSL 0.6 5.4
2020
12.0
12.8
20.0
24.0
14.0
30.0
42.4
40.0
50.0
60.0
Current capacity ~ 73 million MT By the year 2012, Crude Steel Production Capacity Likely to be million tonnes
Source: MoS
110-120 8
4
02-Dec-2010
Greenfield Projects – Update 10-15 million MT capacity at various stages where land has been acquired Another 50 million MT capacity at preliminary stages such as land acquisition, statutory clearances etc. The Global Crisis post-Sep. 2008 has caused deferment of some Greenfield projects Land acquisition has become a critical factor for a few projects Steel capacity by 2012 – expected to be 110-124 million MT
9
Indian Steel – Policy Imperatives Liberal policy regime – import duty at 5% Export of raw materials exceeding domestic consumption 100% foreign investment allowed through automatic route even in mining sector Focus on capacity building and consumption Large Infrastructure Project in Public-Private Partnership (PPP) mode. Demand Booster from infrastructure, housing, automobile, gas and oil pipelines, capital goods (machinery) and consumer goods. 10
5
02-Dec-2010
Indian Steel – Impediments
Capacity addition – hindered by difficulty in land acquisition Uncertain Time frame for land acquisition, environmental clearances. Concerns on depleting raw materials reserves
Need for higher spending on infrastructure (roads, railways & ports) Significant infrastructure constraints in roads, railways, ports, power.
11
The Roadmap
Accelerated capacity building in steel, through Brownfield route to meet demand in the medium term Fast-tracking of Greenfield projects by way of better coordination & monitoring New legal policy regimes on mining, land acquisition & rehabilitation Encourage value addition and production of value added steel products
12
6
02-Dec-2010
The Roadmap (Contd.) Encourage beneficiation methods for utilization of low grade iron ore & fines Energy efficiency, carbon emission reduction and new technology for higher productivity Higher emphasis on resource optimization Spread to niche international markets through quality steel products World’s third largest steel producer by 2014 13
Thank You
7
Indian Steel Industry – An Overview 69th OECD Steel Committee Meeting Paris 2-3 December 2010
1
02-Dec-2010
Indian Steel Demand – Buoyant 56.5
60
52.1
52.4
Steel CAGR in last 5 yrs was 9.4%
46.8
50
41.4 36.4
26.5
40
29.9
27.3
24.7 30
20.3
22.2
Longs Flats
20 10 0
14.1
17
19.6
23
2.1
2.2
2.5
2.7
21.9
23.4
3.2
3.1
Alloys
2009-10
2008-09
2007-08
2006-07
2005-06
2004-05
Steel consumption growth in last 5 yrs was range bound at 9-13%, Per capita steel use is 48 kg vis-a-vis 35 kg in 2005 Steel demand expected to continue @10%+ CAGR till 2020
Steel Demand Driver 10.0 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
9.5
9.7
9.0
8.2
7.0
9.0 7.3
7.6
8.0
8.1
GDP growth to continue at 8-9% Huge infrastructure investment by Govt. ~ $500 billion
2
02-Dec-2010
Indian Steel Demand on High Pedestal 165
Long-term GDP Growth
GDP @9%
148
target rate ~9%
140
133
113
GDP @8%
115
105 78
90
33
26
40
75
59 57
52
65
15
1999-00
• •
2003-04
2007-08
2009-10
2012-13
2016-17
2019-20
High GDP growth - support to steel demand Steel intensity to go up with more fixed asset investment
Indian Steel Demand – Likely Sources Sector-wise incremental steel demand by 2012 (million MT) 1
3
4
100 90 80 70 60 50 40 30 20 10 0
~100
5
30
12 20 AS U
ay s
ns .D ur ab le s Co
Ra ilw
ta lG oo ds Ca pi
Au
to m
ob
ile s
ns t ra /C o In f
AS U
20
08
52
Source: In-house
Private sector investment growing at 15% plus Large infrastructure projects in Public-Private Partnership (PPP) mode Foreign investment of nearly $40 billion committed in steel sector 6
3
02-Dec-2010
Domestic Steel Availability 59.7
India: Steel Production (million MT)
60.0
50.2
50.0
44.4
41.3
38.6
40.0
29.7 26.3
24.7
27.0
22.1
20.4
19.2
30.0
53.5
52.8
Longs
22.3
2004-05
2005-06
2006-07
26.5
30.0
2009-10
21.0
26.4
2008-09
19.4
2003-04
10.0
25.5
2007-08
20.0
Flats
0.0 Source: JPC
Steel consumption in Apr-Sep 2010 rose by 9.8% y-o-y Capacity augmentation to meet domestic demand 7
Indian Steel Capacity By 2020 2009 SAIL JSW
7.8
3.2
TATA
6.8
6.2
ESSAR
9.9
4.6
ISPAT
3.0 2.0
RINL
2.9 3.9
JSPL 2.4
2012
POSCO
32.0
21.0
20.5
6.0
17.0
12.0 9.2
16.0
8.1
16.1
26.5
9.0 12.0
(million MT)
30.0 6.5
22.0
10.0
7.0
Additional capacity by 2020 ~230-240 million MT
3.0
ARCELOR…
0.0
33.5
20.5
18.0
SECONDARY
60.0
35.2
BSPL 1.22.8 3.0 BSL 0.6 5.4
2020
12.0
12.8
20.0
24.0
14.0
30.0
42.4
40.0
50.0
60.0
Current capacity ~ 73 million MT By the year 2012, Crude Steel Production Capacity Likely to be million tonnes
Source: MoS
110-120 8
4
02-Dec-2010
Greenfield Projects – Update 10-15 million MT capacity at various stages where land has been acquired Another 50 million MT capacity at preliminary stages such as land acquisition, statutory clearances etc. The Global Crisis post-Sep. 2008 has caused deferment of some Greenfield projects Land acquisition has become a critical factor for a few projects Steel capacity by 2012 – expected to be 110-124 million MT
9
Indian Steel – Policy Imperatives Liberal policy regime – import duty at 5% Export of raw materials exceeding domestic consumption 100% foreign investment allowed through automatic route even in mining sector Focus on capacity building and consumption Large Infrastructure Project in Public-Private Partnership (PPP) mode. Demand Booster from infrastructure, housing, automobile, gas and oil pipelines, capital goods (machinery) and consumer goods. 10
5
02-Dec-2010
Indian Steel – Impediments
Capacity addition – hindered by difficulty in land acquisition Uncertain Time frame for land acquisition, environmental clearances. Concerns on depleting raw materials reserves
Need for higher spending on infrastructure (roads, railways & ports) Significant infrastructure constraints in roads, railways, ports, power.
11
The Roadmap
Accelerated capacity building in steel, through Brownfield route to meet demand in the medium term Fast-tracking of Greenfield projects by way of better coordination & monitoring New legal policy regimes on mining, land acquisition & rehabilitation Encourage value addition and production of value added steel products
12
6
02-Dec-2010
The Roadmap (Contd.) Encourage beneficiation methods for utilization of low grade iron ore & fines Energy efficiency, carbon emission reduction and new technology for higher productivity Higher emphasis on resource optimization Spread to niche international markets through quality steel products World’s third largest steel producer by 2014 13
Thank You
7
