INTRODUCTION

Steel is crucial to the development of any modern economy and is considered to be one of the
backbones of human civilization. The level of per capita consumption of steel is treated as an
important index of the level of socioeconomic development in a country.
From only three steel plants, a few electric arc furnace-based plants and a mere one million
tonne (MT) capacity status at the time of Independence, India is now the fourth largest crude
steel producer in the world and the largest producer of sponge iron.
Presently, steel contributes to nearly two per cent of the gross domestic product (GDP) and
employs over 500,000 people. The total market value of the Indian steel sector stood at US$
57.8 billion in 2011 and is expected to touch US$ 95.3 billion by 2016. India's per capita steel
consumption stood at 57.8 kilograms in 2013, according to a World Steel Association report
and is expected to rise with increased industrialization throughout the country.

GLOBAL OUTLOOK FOR STEEL 2014

In 2014, global demand is forecast to grow faster at about 3.3%. However, more demand
growth is expected to come from outside of China as the Chinese Government pushes
through economic restructuring with a focus on private consumption.
With the exception of China, global supply and demand for steel will largely follow
economic growth recovery around the world.
In China, national mandates to rationalize capacity will have an effect on supply and as the
Chinese economy moves to a more consumer-driven model, steel consumption is expected to
moderate.
The short-term estimates by World Steel Association for global steel demand are similar on
an overall basis, with some more positive views for growth in the US, the EU, Brazil and
Russia but are relatively lower expectation for Asian countries.
Growth in the Chinese economy continues to be a determining factor for the global steel
market in the medium-to-long term. As China seeks to restrain investment activity,
rebalancing and deleveraging, current forecasts for 2014 are for lower growth rates in
production and demand with the removal of excess capacity.

INDIAN STEEL MARKET SCENARIO

With steels demand growth outpacing growth in domestic production over the last
few years, import dependency has increased

Imports have decreased at a CAGR of 0.72 per cent over FY0812

In FY12, total imports stood at about 6.8 MT

Total domestic demand for steel is estimated at 113.3 million tonnes by 2016-17

TURNAROUND OF INDIAN STEEL SECTOR

India became net steel exporter in 2013-14 after a gap of six years and is likely to maintain
the momentum in 2014-15 as producers are looking to dock more overseas shipment to tide
over subdued domestic consumption. Total steel exports by India during the last fiscal stood
at 5.59 million tonnes (MT), as against imports of 5.44 MT, joint plant committee (JPC), a
unit of the steel ministry, said in a report.
India, now the worlds fourth largest steel maker, had been a net steel importer since 200708 and the trend continued till 2012-13 with 7.9 MT of imports and 5.2 MT of exports.
Before 2007-08, Indias exports were more than its imports. About 4.1% higher exports and
31.3% decline in imports helped India become net exporter of steel.
Indian steel makers are tapping new markets, creating more value-added products and selling
directly to clients as they try to export more to take advantage of a weaker rupee that is
making Indian steel products more competitive in the global market.

EXPORT OPPORTUNITIES FOR INDIAN STEEL INDUSTRY

European Union - Steel consumption in the EU is expected to expand by about 2.0%

to 138 million tonnes in 2014.
US - Residential construction is driving steel demand to be followed by nonresidential construction in the near term. Also the automotive sector and shale gasrelated infrastructure will provide further impetus to steel demand.
Brazil - Steel demand is forecast to grow at 3.6% per annum, driven by the growth
from the infrastructure, construction and automotive sectors.
Africa - Construction, driven by population growth and infrastructure development, is
driving steel demand. Africas urban growth of 3.5% during the last two decades is
expected to continue into 2050. Africa will import steel to fulfil demand as the two
largest steel producers, South Africa and Egypt, lack enough capacity to supply.

INDIA TRADE RELATIONS WITH OTHER COUNTRIES (specific to Steel Industry)

India and United States
United States, Canada and the European Union were regular importers of Indian steel plates
and coils. These markets were developed by Indian steel industry with a lot of efforts. Things
were moving smoothly. However, with the fear of recession in the USA and continuous
depressed market, the US Government took stringent steps immediately after the new
administration took over. So the Steel Ministry appealed to these countries to have a re-look
into their anti-dumping measures and ensure their WTO compatibility to avoid anti-dumping
and countervailing duties. The Steel Ministry asked the Commerce Ministry to take up the
case with WTO and approached its Dispute Settlement Body (DSB) to consider the case. In
between, being influenced by American protectionist steel lobby, the US Government has
given the International Trade Commission (ITC) the terms of reference for an investigation of
steel imports under Section 201 of the Trade Act, 1974. Under Section 201, the US President
can impose temporary import restrictions to give an opportunity to restructure domestic
industry and become more competitive. But ITC has to determine first that the imports are
harmful to domestic producers and anti-import protectionist measures are to be taken as a
follow-up action. Such anti-import measures are to be viewed from the US market conditions
and from the standpoint of domestic producers. This move by the US administration has been
in line with the traditional American "Unfair foreigners" line followed by the US steel
industry. This has been contested by the EU and Japan. Recently, they have won such cases.
Realising the gravity of the situation, a high level steel team headed by the Steel Secretary
with representatives of the Government and the industry was sent to the US to discuss with
the US Department of Commerce and other agencies various protective measures imposed by
the US. The team had useful discussions in Washington DC with senior representatives of the
US Department of Commerce, the US Trade Representatives Office, the US Department of
State, National Security Council, US Congressmen, influential think tanks and others. The
proposal for a suspension agreement on coil was vigorously pursued with the US side. In
turn, they agreed to reappraise the matter. The exchanges have contributed to a better
appreciation of Indias concerns by the US Administration.
The possibility of fighting out the anti-dumping protective measures through WTO is a
long drawn-out process. Developing countries like India have little experience in fighting
such cases at the international level. The Indian steel team thought of a compromise if the US
offered quantitative restrictions of around 1 million tonnes annually. The Steel Ministry and
the Government of India are fighting the issue to reach a settlement at the earliest.
In spite of protective trade barriers put up by the US, Canada and the European countries,
the Indian steel industry has performed well in exporting to alternative markets.
However, India will have to find out its new market in South-East Asian countries which are
showing signs of economic revival. Attempts to explore additional markets in the Middle
East, Bangladesh, Myanmar, South Africa, Mexico, Taiwan and some other countries have

also been successful. The Indian exporters would be compelled to search out alternative
markets for products like coils and other flat products or have suitable agreements with major
importing countries to keep their presence in these markets.

India and China

India's steel consumption is expected to grow at its fastest pace in five years next year on
Prime Minister Narendra Modi's infrastructure push, but a scarcity of raw materials means it
will be at the expense of another key goal - curbing imports.
In his triumphant election campaign, Modi criticised the last government for exporting iron
ore but importing steel. But his first five months as the prime minister has coincided with a
surge in imports of both, denting his high-decibel drive to make India an export powerhouse.
India's steel imports from China, the world's biggest producer of the alloy, doubled in AprilSeptember from a year ago though the country has enough capacity to meet its demand.
While India's consumption is expected to rise, China will continue to see a downtrend, likely
leading to a flood of cheap steel from China just as Modi pushes ahead with a signature
'Make in India' initiative to boost industry.

India and Germany

India and Brazil

India and Sri Lanka

Shale Gas and its impact on Indian Iron and Steel Industry A Futuristic Scenario

Shale gas will have far reaching impact on the Indian industry like power, fertilizer,
refineries, petro-chemicals and steel industry.
In steel sector, particularly in iron making, natural gas along with shale gas can
promote the green technologies and lower the CO2 emission.
Shale gas application can be found specifically in two areas, viz., a) as injectant
through tuyeres in place of/alongwith pulverised coal in blast furnace. This will
reduce the coke rate, increase furnace productivity and lower CO2 emissions due to
presence of H2 in the gas. b) as fuel/reductant for gas based direct reduction for
production of sponge iron. In both the cases, besides thermal energy, the chemical
energy of the gas is also effectively utilised, thereby maximising benefits over such
application areas where gas is used purely as fuel.
Large shale gas discovery will invariably impact the natural gas pricing and
affordability in the country. Substantial reduction in CO2 emissions can be foreseen if
more of iron is produced through DR-EAF route using the natural gas/shale gas
instead of following the BF-BOF route. Thus to promote green iron making
technology and to meet countrys commitment in bringing down CO2 levels, it is
important that Govt. of India adopts a favourable allocation policy for the
natural/shale gas to iron and steel sector in the coming future. This will also reduce
substantially the pollution load of the plant as sinter plant, coke ovens etc. are getting
eliminated.
Undoubtedly, the shale gas revolution is expected to spread around the planet.
And with this expansion, DRI will become much more common than it is today.

Major Initiatives taken by the Ministry of Steel during the year 2013-14

To ensure easy availability of raw material in domestic market at reasonable prices,

export duty on iron ore @ 30 % and export duty on iron ore pellet @ 5% were
imposed. Export of iron ore fell from 117.37 million tonnes in 2009-10 to 12.24
million tonnes in 2013-14.
Ministry of Steel has been awarded the ISO 9001:2008 certificate. It has
become the first Ministry under Central Government to be awarded such
certificate.
Process of drafting of New National Steel Policy to replace the existing National
Steel Policy,2005 for development of steel industry with the focus on achieving the
targeted production of 300 mtpa of steel, is underway.
A Long Term Perspective for Steel Sector to achieve targeted capacity of
300 million tonne is being prepared.
A Task Force has been set up to identify the R&D and Technology
Development needs of the country in Iron & Steel sector and also to evolve
institutional mechanism.
Ministry of Steel is actively engaged in fast tracking decisions/resolution of
issues of steel sector projects, which are delayed, in association with the
Project Monitoring Group (PMG) constituted by the Cabinet Committee on
Investment (CCI).
Inter Ministerial Group (IMG) meetings under the Chairmanship of Secretary
(Steel) are being held regularly to sort out infrastructure constraints of Steel
industry and other related raw material issues.
Steps have been taken for raw material securitization through MoUs, MoAs
and LoIs withAfghanistan, Japan, Brazil, Uruguay, Tanzania, Zimbabwe,
Canada and Poland.
Under the Steel Development Fund(SDF) assisted scheme, 83 projects have
been approved so far with total cost of Rs.696.27 crore with SDF assistance of
Rs.389.36 crore. Under the Plan Fund Scheme, 09 R&D projects have been
approved with a total cost of Rs.125.20 crore involving Plan Fund of Rs.89.22
crore.
There are about 1800 steel re-rolling mills in India and most of them have
adopted old and obsolete technologies resulting in very high energy
consumption and GHG emission. To address the issues, Ministry of Steel
implemented an Energy efficiency improvement project in selective Re
Rolling Mills in India in collaboration with UNDP and GEF. The project has
resulted in significant saving (20-50%) in fossil fuel consumption leading to
equivalent reduction in GHG emission. Encouraged by the results of the
project, UNDP, Ministry of Steel and Government of Australia has initiated a
new energy efficiency improvement project in the SME sector.
Sevottam Compliant Citizens Charter being implemented by the Ministry of
Steel to provide prompt services to citizens/clients has been updated.

Various work processes in the Ministry of Steel reviewed and scope of

discretion minimized.
A LAN enabled tracking and monitoring service for Parliament assurances,
audit paras, dak diary and file movement has been made fully operational in
the Ministry
E-Requisition, Stock & Inventory Management System, Officer on Tour
Information System, ESubmission & Approval System, Knowledge
Management System and Steel MIS have been made operational on Ministry
via Intranet Portal.
Ministry of Steel in association with Steel Industry put up Steel Pavillion at
India International Trade Fair, 2013 where several items of Steel and mining
sector were showcased.

REFERENCES:
1. http://steel.gov.in/Annual%20Report%20(201314)/English/Annual%20Report%20(E
nglish).pdf
2. http://commerce.nic.in/eidb/ecomxcntq.asp
3. http://www.ibef.org/industry/steel.aspx
4. http://www.ey.com/GL/en/Industries/Mining---Metals/EY---Global-steel-2014
5. Newspaper Articles and Clippings.