India is now world’s No 3 steel producer

Discussion in 'Economy & Infrastructure' started by Singh, Jul 27, 2009.

  1. Singh

    Singh Phat Cat Administrator

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    India is now world’s No 3 steel producer


    The writing was on the wall for the developed economies, but now the lettering is getting bolder. In the first six months of this year, India has moved up two places to the third position on the list of top steel producing countries; only China and Japan are ahead.

    While every other country in the pecking order has witnessed a steep decline in production, India and China are the only two countries to have registered growth. India's steel production grew by 1.3 per cent to 27.55 million tonnes (mt); China, with a very high base, startled even experts with a growth of 1.2 per cent to 266.58 mt.

    The United States led the diving board with a 50 per cent decline, with the likes of Germany, South Korea and Brazil populating the list.

    "I have always maintained that we would continue to grow despite the global recession because the latent demand for steel in the domestic market is huge," said SK Roongta, chairman, Steel Authority of India Ltd — the country's largest steel producer. "Our per capita consumption for steel is still one of the lowest in the world and the potential is so huge that at times our production is not able to match up to the demand."

    But will India manage to hold on to the fairytale growth when everybody else is downing shutters? Indications are, yes: SAIL's production was up 3.7 per cent in April-June ’09; JSW was up 45 per cent and Tata Steel 20 per cent.

    "The demand for steel across sectors is on the way up and the worst clearly seems to be over," said Sajjan Jindal, vice chairman, JSW Steel. JSW’s Indian plants are working full time, but US operations are badly hit.

    India is now world?s No 3 steel producer- Hindustan Times
     
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  3. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Land of the GODS - "Dev Bhomi".
    this shows how badly the world at large has performed, a target that last year we thought we could achieve only in 2013 has been done 4yeas ahead of time and well there goes the tale of the so called economic experts who keep saying something and some thing else keeps happening and i may add, its all music to my ears as its all good news.

    its good to see the industry is still growing and this further speaks well about the industries which heavily use steel related products and this growth at a time when the steel exports have taken a big hit is commendable, and certainly argues well for the economy on the whole.

    my only wish, the abhishek manu singhvi's now dont start dancing to this and start projecting this accomplishment all a doing of the cong govt where as the facts state something different.
     
  4. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    i would not be suprised to see India in the #1 spot within the next 5 years
     
  5. ant80

    ant80 Regular Member

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    Not going to happen.

    Summary:
    India, 27.55 mt
    China: 266.58 mt

    More than an order of magnitude higher. China has a competitive advantage due to the economic system.
     
  6. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    China's infrastruture build out is in full swing, India's is just starting and yet to pick up momentum, also many huge steel deals are still on hold (mittal).
     
  7. Singh

    Singh Phat Cat Administrator

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    To add to what Thakur sahab has posted,

    India's steel production rose just 1.3% and China's 1.2% and the steel production of the erstwhile top producers like S.K, Japan, US, Ukraine fell by over 30-50%, helping India claim the 3rd spot.

    India had originally outlined steel investments to the tune of 50-125bn$ to reach this "coveted" position. The investment figure has gone down significantly due to the economic crisis; neither the growth in our steel production has been not as rapid as had been outlined.

    Nevertheless, the fact that the steel production has increased, many anchor investments are still in the pipeline goes to show that the Indian economy is resilient as compared to many developed economies.

    The multiplier effect of steel to GDP is 1.2x-1.7x; ie for every $ invested/spent in steel production results in a corresponding increase of 1.2-1.7$ in GDP. This is largely because Steel has tremendous backward and forward linkages.

    So this rise in steel production (and consumption) goes to show a healthy GDP and growth in many core industries such as mining, power generation, transport, manufacturing, infrastructure etc.
     
  8. Singh

    Singh Phat Cat Administrator

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    China is the largest producer, consumer, exporter and importer of steel.

    As per the planned investments India's steel production would've reached 75mt by 2012 and 200mt by 2020, I don't think the targets will be met.

    China lacks a competitive advantage in steel. The cheapest steel in the world is produced by Tata Steel and then comes some Ukrainian company.

    China imports the two main raw materials iron ore and coal.
     
  9. ajay_ijn

    ajay_ijn Regular Member

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    hi guyz, back into forums after a long long time.
    Orissa, Chattisgarh, Jharkhand have great opportunity to satisfy Indias rising demand for steel from construction sector. frankly I don't know what is making India No.3 Steel producer in the world, we haven't realised our potential yet. if planned investments materialize within few years, we can cross targets easily. Tata, Mittal, Posco, Jindal can expand rapidly to meet the demand but pricing issues, iron ore also need to be sorted out, after they have to compete Chinese prices.

    If we are back on 9% growth curve for few years then we may have to start importing more and more steel.

    if we can sort of issues like land aquisition, farmer compensation, environmental issues and reduce redtape, infrastructure will automatically fall in place to cater to manufacturing companies.
    Steel companies themselves will build ports, power plants to solve the problem. Sometimes Railways and Roads.

    lets see what no.1 steel maker mittal will do in India. Much depends on how much demand is there from Construction sector.
     
  10. F-14

    F-14 Global Defence Moderator Senior Member

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    Hey ajay wassup bro good to see you after a long time hoping to see you on a regular basis dude
     
  11. ant80

    ant80 Regular Member

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    I didn't realize that. I was strictly going by the numbers, but why do you think China lacks a competitive advantage in steel? I know they import a LOT of coal, but how do India's iron reserves compare with China's? I somewhat recall reading in my school days that India exports iron ore to China. Is this true? Another question is, can the production scale well while maintaining competitive advantage?

    I would like to know the basics of the equation.

    Also someone mentioned that steel production has a 1.2-1.7 multiplicative factor on growth of economy. How?

    Appreciate very much. Thanks.
     
  12. ajay_ijn

    ajay_ijn Regular Member

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    India exports lots of iron ore to China but chinese recently found lots iron ore, they may not need to import from other countries.

    the main reason Steel companies are interested in India is because of availaibility of iron ore, coal, cheap labour, strong demand for steel as consumption grows. the main challenge is land aquisition and farmer compensation in India, then comes infrastructure. Mittal also talks about redtape in India.

    i am not aware of equations but manufacturing sector does encourage people in rural India to move from agriculture to jobs.

    the main problem here is most steel projects are not moving beyond land aquisition, that means if India continues strong growth, we may have to import more steel.
     
  13. badguy2000

    badguy2000 Respected Member Senior Member

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    as for steel production,
    China=Japan+USA+EU+Russia+India+Canada+Austraila+S.korea+.....
     
  14. badguy2000

    badguy2000 Respected Member Senior Member

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    not yet.

    China's per nominal GDP is only 3500 USD, 1/10 of USA and other mature industrialized economies.

    west china and center china still are hungery for more infrastructure.

    Until China's per nominal GDP reachs 20,000 USD, China's steel prodcution won't decline.

    Furthermore, in forseeable future, China's steel production will increase ,maybe double.
     
  15. badguy2000

    badguy2000 Respected Member Senior Member

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    don't drawn conclusion so easily and in such a harsh way.


    the facilities and equipment of India steel industry is decades behind CHina.

    most steel plants in CHIna were built recently and have world last facilites and eqipment. they can produce much more types/models of steels than India, from lowest-end steel to high-end steel.

    Due to cheap ores, India may produce low-end steel in a lower price ,but india has serous trouble in manufacture high-end, even mid-end steels,for the sake of its outdated factory facilities.

    just have a "google", then you should know where you proud tata's car steel is imported from.

    furthermore ,india even could not produce steel for its AC,until recently.
     
  16. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Badguy you are right but there are Indian based companies outside of India that can change things in a big way but are being held up by bureacratic non sense.
     
  17. ajay_ijn

    ajay_ijn Regular Member

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    The main problem here is satisfying demand for Indias construction sector, auto companies etc if India is able to do that its more than enough for steel companies. anything else will be exported. So if there is no demand for any forms of hi-end steel, no production.

    still India gets FDI from foreign companies. Posco, Acrelor Mittal- the worlds largest steel maker. Tata itself is expanding and I am sure when they invest in new plants, they will build all forms of steel with hi-end equipment and why not when there is strong local demand and lots of raw materials availaible. if its not availaible in India, then equipment it can imported.

    besides Tata already has Corus in its pocket. I guess Corus can produce all forms of hi-end steel, hence Tata steel will implement same technology for Indian steel plants too. main problem is with the global demand. if demand is enough in India then Indian companies will produce all forms of steel.

    India has other challenges, land aquisition and farmer compensation takes lot of time, if govt forces people, they can kick govt out next time during elections unlike China where everything can happen so fast and people have no option but to accept what their govt says.
    then what is this?
    VW and Nissan-Renault to source steel from Tata
    and yes ofcourse we are very very proud of Nano. its one major innovations that happened in India.
     
  18. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

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    Holy Hell
    India mainly exports low grade Iron ore to China. High grade iron ore (greater than Grade 63) is banned by the Indian Govt. I guess China sources High grade Iron ore from Brazil.
     
  19. badguy2000

    badguy2000 Respected Member Senior Member

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    if ore cost is not taken into cosideration,Chinese steel industry has huge cost superority to all non-chinese steel industries.

    without the limiation of ore, chinese steel industry would wipe off all steel industry outside china.
     
  20. ajay_ijn

    ajay_ijn Regular Member

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    what has that got to with p2pradas post or the topics name?, we are not talking about global steel industry or chinese specifically. Its only and only about Indian Steel industry and specifically about the total production figues.

    also all other countries are not idiots to allow cheap chinese steel to be openly dumped in their countries. There are lot more issues involved here before we can simply write off rest of the world and praise your own country. right from the way Govt functions, supports the industry with sops, infrastructure, tax, the way steel companies are allowed to expand, the way climate change issues are handled.
     

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