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Presented By

SEC EGroup 12

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INDUSTRY PROFILE

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STEEL INDUSTRY-OVERVIEWIMPORTANCE :

1)Crucial to development of modern economy2)Level ofper capita consumption of steel is an important indicator of socio-

economic development and living standard of people

3)Strong forward and backward linkages in terms of material flow and incomegeneration

GLOBAL SCENARIO1) In 2012 the world crude steel production reached 1518 million tonnes (mt)

and showed a growth of 6.2% over 2011. (Source: World Steel Associationor WSA)

2)Chinaremained the worlds largest crude steel producer in 2012 (684 mt)

followed by Japan (108 mt), the USA (86.4 mt) and India (77.62 mt; prov) atthe 4th position (77.62 mt)

3)In 2013, it is forecasted that world steel demand will grow further by 4.5% toaround 1486 Mt

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Trends in India Steel Industry

In 2012-2013, India recorded Total Steel production of about 77.62 MT

During 2012-2013, demand has grown by 4.6% y-o-y to 68.2 million tonnes.

The World Steel Association forecasted local steel demand to grow at 5.9per cent and 7 per cent in 2013 and 2014 respectively..

The Indian steel sector is contributing to nearly 2% of the GDP andemployed over 5 lac people

DOMESTIC OUTLOOK AND FORECAST

Domestic steel outlook remains weak with lesser possibility of turnaround inthe current financial year

Demand slowdown from key industries like construction, auto andinfrastructure.A meaningful recovery in FY14 is unlikely as weaker rupeewould delay rate cuts

Most domestic steel firms may face margin pressure on lower prices andlimited benefit from lower input costs (especially for iron ore) due tovertical integration and dependence on the local demand supply driven e-auction ore.

Net debt position of companies like Tata Steel and JSW Steel would rise withhigher foreign-currency debt due to rupee depreciation

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PLAYERS PROFILE

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Major Steel Manufacturers

1.Total world crude steel production is 1547 MT in2012.

2. China is the worlds largest producer of Crude steel;India is the fourth largest producer of Crude Steel.

3.Major Players in world steel Industry-

- Largest player is Arcelor Mittal and Chinese dominance in World top 10

4.Steel manufacturing in India is by Public and Private

players.- Largest public player: SAIL, Private player: TSL

5. Finished Steel products are divided in Long

Products and Flat Products.

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Steel Production Scenario in India in 2013-14

In India high level of competition has historically resulted inlower operating margins compared to other commodityindustries.

Debt-equity ratio increased during FY2009-12 because of

lower profitability.

Profitability of Indian Steel Manufacturers

M k t Sh f M j

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Market Share of Major

Players in India The steel market in India is dominated predominantly by

SAIL with 32% market share.

The second highest is TSL(Tata Steel Limited) with 23%market share.

7%9%

23%

1%1%1%32%

23%

2%0Bhushan Steel Ltd

Jindal Steel & Power Ltd

JSW Steel Ltd

Kalyani Steels Ltd

Kirloskar Ferrous Industries Ltd.

Monnet Ispat & Energy Ltd

Steel Authority of India Ltd

Tata Steel Ltd

Usha Martin Ltd

India Steel Market Share:%share by value,2011-12Source:CRISIL Research

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MACROECONOMICS

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Key Policies driving growth National Steel Policy 2005

Issues to address:

Allowing Private Ownership and Foreign Investment

Improving Intellectual Property Laws

Deregulation of Pricing and Distribution of Iron andSteel

Special Economic Zones (SEZs) Special Investment Regions

Impact of union budget 2013-14

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FDI in Steel Industry FDI cap limit in this sector is 100%

FDI in Steel has witnessed a growth of 60.73% at US $ 1,765.07 million

POSCOs 12 (MTPA) in Orissa entailing an investment of Rs52,000 crore,

POSCOs Karnataka project of 6 MTPA with an investment of Rs32,000

crore

Arcelo Mittals Orissa project of 12 MTPA with Rs40,000 crore investment,

Arcelor Mittals Jharkhand, Karnataka state projects with a capacity of 12

MTPA, 6 MTPA and investment of Rs50,000 crore and Rs30,000 crore

respectively.

NMDC-Severstal has proposed an investment of Rs9000 crore for 3 MTPA

plant in Karnataka and Tata Steel-Nippon Ltd has proposed 60,000 tonnes

project in Jharkhand entailing an investment of Rs2300 cr.

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THANK YOU