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.
|
|