Steel Industry Pitch

8/8/2019 Steel Industry Pitch

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Section I:-Market Overview

Indian SteelIndustry

& ,Institute for Technology Management KhargharAugust 2010


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Section I:-Market Overview


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Figures in milliontonnes

n in India is going up as against falling world pro

:- ,Source Annual Report MoS :- , ;Source Annual Report MoS IBEF

, ,

, , , , :- - , , , :-k Bolded Axis titles black Legend black Dark Bars RGB 64 105 156 Light Bars 7

. % . . %Production grew at a CAGR of 6 7 vs CAGR of 9 3 for Consumption for the period of 2- to 2008 09

:

-Chart Title 14


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from being a net exporter initially due to increase

:- , ;Source Annual Report MoS IBEF


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pected to bolster thereby pressing the case for cap

-y 2015 1656 MT now

& &ous boost in infra automobiles expected to bolster demand thereby increase per capita consumpti


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&sector has more or less been range bound lately

( % ) -red by Jindal 34 index weight Price reflecting ex bonus price

&signed between steel cos NMDC for supply of limestone

% & -s grow by 25 it announces kick off of Orrisa steel project

.Average result season Results below expectations

-India s annual steel production expected to touch 124 MT by 2011 12Bhushansteel to set up steel plant in Karnataka for Rs 289 bn. &affected by China Recently curtailed production by China brought down steel prices thereby performance of steel

Global steel prices rose due to excess demand from China and same were reflected in Indian cos sale realisat. .Steel prices came down but input cost remained Hence margins of steel co squ

:- &Source NSE BSE website:- % (Note Top 10 cos by mcap constitute about 91 of total industry mcap 48).cos Index based on those top 10 cos


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Section II:-Market

Segmentation


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Market segmentation Product End User wise

Corrosion

resistantsteel

ToolSteel Heat

Resistant

Steel

Billets &BarsRodsStructural

s &RailsWires

ot RolledProducts Plates& Sheets

CoilsStrips old RolledProducts

SheetsCoilsStrips

Construction

Automotives

AeroSpace

Consumer Goods

Material Handling

Energy & Power

Rail

Engineering

Shipbuilding

Packaging

Product Wise End user wise

( ) & %NAS production Flat products constitute 43, % & % ,by Infrastructure 30 by automotives reaming 15 by rest of the sectors like Aerospace Packaging

:-Segmentation


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/rategic Key Industry given the inherent structure

Direct Reduced Iron

Iron Ore Pig Iron

Coke Secondary Steel Production

Primary Steel ProductionStandardized Steel Products

Specialist Steel Products

Finished Steel Products

Mining Industry Steel IndustryEnd User

Recycling Industry

Traders, Brokers, Project Finance & exchanges Stockholders

Equipment, Transport & support services

d after smelting inputs in a limestone flux&ctly iron ore as raw material secondary steel means steel produced out of basic scrap from the pro


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Section III:- Competitive

Landscape


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%less consolidated as top 3 players command 44 of

Major Producers Mini Producers

JSW Steel EAF 33 units

Essar Steel IF 970 units

Ispat Industries MBF 2 units

Jindal Steel &Power

&both implying that there is an oligopoly in the industry medium to high concentration

de steel production& .market share ranks among top 10 producers of steel in the world Its is also the lowest cost produ

& %l production SAIL is the largest player with 26 market share

:- , - Source MoS 2008 09


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Section IV:-Growth Drivers


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Multiple Growth Drivers boosting demand for steel


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-quiring capacity expansion upto124MT by 2011 1


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India to be the 2ndlargest manufacturer of steel

Steel Industry Pitch

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