Mild Steel Ingots  

Major Characteristics

  • Steel is an alloy consisting mostly of iron, with varying amounts of other elements like carbon, manganese, chromium, silicon, oxygen etc. Different grades of steel are produced by adjusting the chemical composition and by slight variations in the different stages of steel-making process. Currently, there are more than 3000 catalogued grades of steel available.
  • Steel is one of the most common materials in the world and is a major component in buildings, infrastructure, tools, ships, automobiles, machines, and appliances. It is environment friendly, can be recycled and requires considerably less energy to produce than some other metals.
  • Steel market is primarily divided into two categories - flat and long.
    • Flat Steel: Plate or a (hot or cold) rolled strip product. Typical products are plates, HR coils, HR sheets, CR coils, CR sheets, Galvanised plates (GP), Galvanised coils (GC), pipes etc
    • Long Steel: Rod or a bar. Typical rod products are the reinforcing rods made from sponge iron for concrete, ingots, billets, engineering products, gears tools etc.


Global Scenario

  • Global steel production grew enormously in the 20th century from a mere 28 million tonnes at the beginning of the century to 781 million tonnes at the end. Further progress has been seen in the first decade of the 21st century. The global crude steel production in 2008 is reported to be 1,330 million tonnes.
  • Steel consumption of a country increases when its economy is growing, as its government invests in infrastructure and transport, and the nation sees building of new factories and houses. Construction industry accounts for around 50% of the global steel consumption. Cars, which accounts for 13% of the global steel consumption is the second largest consuming sector.
  • The main producing and consuming regions of steel have shifted from the developed world to the developing regions with Asia accounting for more than 55% of the global steel production. The five largest producers of crude in 2008 are China (500 million tonnes), Japan (199 million tonnes), US (91 million tonnes), Russia (68 million tonnes) and India (55 million tonnes)
  • Global steel-making capacity has outstripped consumption in recent years. The world-wide apparent steel use in 2008 is estimated to be around 1197 million tonnes, which is down by 1.4% from the 2007 figures. The largest consumers in 2008 are China (425.7 million tonnes), US (97.5), Japan (76.4), South Korea (58.6) and India (52.6 million tonnes)
  • Steel is one of the most recycled materials, basically because it is economical to do so and does not result in any loss of properties. It is estimated that currently over a third of global steel comes from recycled material. However, recycling rates vary a lot between countries with Spain and Turkey producing nearly 90% of their steel from recycled material in 2008, followed by Italy (77%), the United States (64%), South Korea (52%), Russia/Ukraine (48%) and Germany (45%). The share of recycling-based production is estimated to be considerably lower in China, India and Brazil.


Indian Scenario

  • The Indian steel industry has entered into a new development phase from 2005-06, riding high on a resurgent economy and rising demand for steel. The sharp rise in production has lead to India becoming the fifth largest producer of steel in the world, with a 2008 crude steel production of above 55 million tonnes.
  • The growth phase in India's steel industry is expected to pick pace further. India's steel consumption is projected to increase annually by above 10% till 2012, fuelled by demand for construction projects.
  • The scope for raising the total consumption of steel in India is huge, given that per capita steel consumption is only 40 kg - compared to 150 kg across the world and 250 kg in China.
  • The National Steel Policy has envisaged steel production to reach 110 million tonnes by 2019-20. However, Ministry of Steel has projected that the steel capacity in the county is likely to be 124.06 million tonnes by 2011-12 itself.
  • Iron and steel are freely exportable and importable as per current government guidelines. India is estimated to have exported 4.6 million tonnes and imported 6.6 million tonnes of carbon steel in 2007-08.


Price Influencing Factors

  • Indian steel prices are largely influenced by the domestic demand and supply scenario, with major consumption coming from infrastructural development activities.
  • While, the international price trend strongly influences the domestic price trend, the domestic prices do not strictly follow any single global market on a daily basis.
  • Changes in duty tariffs, variations in prices of input materials like iron, coal, power, freight which influence the cost of production impact the price of steel.
  • Globally, steel production has outstripped consumption in recent years, despite capacity utilization being only around 50% in major developed markets like US, EU and Japan. Demand has fallen in developed countries and the demand from emerging economies like China, India and Brazil is the only stabilizing factor in the global steel market currently.
  • The steel market is influenced by macro-economic factors like strength of the economy, Government spending on infrastructure, interest rates, currency movements etc as these factors have a profound influence on public, private and individual demand for steel.