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Steel Industry at a Glance

India is the 5th largest steel producer in the world. It is expected to become the second largest producer of crude steel by 2012, doubling its capacity to 124 million tonnes.

Steel production rose 4.2% to reach 60 million tonnes in 2009-2010. Domestic crude steel production grew at a compounded annual growth rate of 8.6 per cent during 2004-05 and 2008-09, according to the Steel Ministry.

The National Steel Policy 2005 had projected an annual steel consumption growth of 7 % based on a GDP growth rate of 7-7.5% and production of 110 million tonnes of crude steel by 2019-20. Going by the existing growth trends envisaged that in the next five years, demand will grow at these estimates are likely to be exceeded and it is higher annual average rate of over 10% as compared to around 7% growth achieved between 1991-92 and 2005-06.

Rise in demand from automobile, infrastructure and housing sectors, consumption of steel in India rose to 56 million tonnes in FY 2010, up by 8% over the previous year.

The domestic steel sector has attracted a staggering investment of about US$ 238 billion, according to the Steel Ministry. This consists of nearly 222 MoUs signed between the investors and various state governments mostly in the states of Orissa, Jharkhand, Chhattisgarh and West Bengal.

  • SAIL is planning to set up a 12-million tonne plant in Jharkhand.
  • In December, Larsen & Toubro (L&T) and state-owned Nuclear Power Corporation of India Limited (NPCIL) formed a US$ 373.2 million joint venture for specialised steel and forging products.
  • Stainless steel manufacturer and exporter, Varun Industries, is setting up a US$ 171.8 million stainless steel-cum-alloy steel plant at Rohat, Jodhpur.
  • Tata Steel has entered into a joint venture with Japan’s Nippon Steel for production and sales of automotive cold-rolled flat products at Jamshedpur. The JV is expected to invest US$ 400 million to set up an automobile venture in India.
  • Steel major, JSW Steel has earmarked a capex of US$ 1.6 billion for 2010-11 and plans to increase capacity of its Bellary plant in Karnataka from 7 MT to 10 MT by end of 2010-11.

However, the projects in the steel industry continue to face hurdles relating to:

  • land acquisition
  • rehabilitation of displaced people
  • procurement of forest clearances
  • iron ore mining leases

Resultantly, the greenfield projects of the JSW group in Jharkhand and West Bengal have been         stalled in August 2009. The two projects of Arcelor Mittal India of Rs.40,000 crore each,    announced in 2005-06 have made little progress.

Major initiatives taken by the Ministry of Steel includes reduction in Central Value Added Tax (CENVAT) on steel items from 14% to 10% with effect from 24 Feb 2009.

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Categories: Metals
  1. M. Reggane
    September 30, 2010 at 1:02 pm

    Have seen another quite a detailed report on the subject here http://www.writrs.com/2256-analysis-indian-steel-industry-with-comparative-study-sail.php

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