Posts Tagged ‘steel industry’

STEEL…….. INDICATOR OF ECONOMIC DEVELOPMENT

Due to most crucial necessity of steel in infrastructural and overall economic development, steel industry is often considered as an economic indicator of any country’s development. Steel seems to be heading for consolidation in the coming years as the global economic recovery is gaining momentum. In fact, China and India have reported huge rise in demand for steel with construction and auto sectors growing at a higher speed.

.

Steel is not a single product. It is an alloy consisting mostly of iron, with a carbon content between 0.2% and 2.1% by weight, depending on the grade. There are currently more than 3,500 different grades of steel with many different physical, chemical, environmental properties. If the Eiffel Tower were to be rebuilt today the engineers would only need one-third of the amount of steel.

.

Carbon Steel, Coated Steel (Galvanized & Color coated), billet, Electric Sheets, Flat Steel Products, Long Steel Products, slabs, Flat steel coil products(Strip) are the some of the finished steel.

.

INDIAN SCENARIO

.

According to the annual report 2009-10 by the Ministry of Steel, India is the fifth largest producer of steel in the world and it will become the world’s second-largest steel producer by 2012, more than doubling its capacity to 124 million tonnes (MT).

.

Steel production rose 4.2 per cent to reach 60 MT in 2009-2010 and has an installed capacity of 72.76 million tones. According to the Ministry of Steel, Steel production in the 2010/11 (April-March) fiscal year is likely to be 65 million tones.

.

The growth in steel consumption in any country is a positive sign for economic growth of that country. Due to improved demand from sectors like automobile, infrastructure and housing, India’s steel consumption rose 9.6 per cent to 4.14 million tonnes (MT) in April 2010. Exports continued to slide and dropped 34.8 per cent to 1.84 lakh tonnes in April, revealing the slow pace of recovery in main steel import destination–the US and the European markets.

.

Some important facts

.

?The domestic steel sector has attracted an investment of about US$ 238 billion.
This consists of nearly 222 MoU’s signed between the investors and state governments of Orissa, Jharkhand, Chhattisgarh and West Bengal.

.

?Due to some government initiative in the budget and higher spending on infrastructure development, steel demand is likely to increase by 10 percent inthe fiscal year to March 2011. In the Union Budget 2010-11, India’s Finance Minister Pranab Mukherjee proposed to invest 1.73 trillion rupees on infrastructure sector, which will further promote the steel industry.

.

Global Production and Consumption

.

World production of crude steel in March 2010 rose by 31% to 120.3 million tonnes, the highest monthly total since May 2008. The total production in January to March is 342.4 million tonnes, 29% higher than the same period in 2009. This figures shows clearly that most countries are on path of rapid recovery from the recession. From January to March Chinese steel production increased by 24.5% to 158 million tonnes, Japan’s production jumped by 51% and South Korea increased by 29% .

.

Current Scenario

.

Steel makers in the country had increased their prices for the third time this year in April due to spiralling iron ore and coking coal prices. Iron ore prices in 2010 had almost doubled from last year’s levels to $120-160 a tonne. But the industry is hopeful that curbing exports would help reduce iron ore prices.

.

Prices downgraded by around 13% in the month of April 2010, after hovering in broad range of Rs.25,130-30,150 per tonne. This is as compared to 2.06% gains in same month last year. Moreover, prices have fallen by around 4.50 percent since the year start SAIL had announced a price cut of Rs2,000 per tonne for its long products effective from 1st May 2010. However, this is not an indication of any future fall in steel prices. There is consumer resistance to further price increase but ultimately the pattern of global prices is still followed here and so we will also depend on the same.