Steel Re-Rolling Mills Association of 3 of 15 19th Issue Steel Re Rolling Mills Association of India visit SRMA STEEL NEWSLETTER SRMA Steel Re Rolling Mills Association of India SRMA Steel News is a division of Steel

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  • Page 2 of 15 19th

    Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

    SRMA STEEL NEWSLETTER

    SRMA

    Steel Re Rolling Mills Association of India

    www.sram.co.in

    Steel Re-Rolling Mills Association of India www.srma.co.in Email : srmakol@srma.co.in

    Sl. No, Name

    1. Shri B.M. Beriwala,

    Chairman

    2. Shri Jagmel Singh Matharoo,

    Vice Chairman

    3. Shri Ramesh Kumar Jain,

    Treasurer

    4. Shri Sanjay Jain

    5. Shri Kailasj Goel

    6. Shri G P Agarwal

    7. Shri O P Agarwal

    8. Shri S K Sharda

    9. Shri Sandip Kumar Agarwal

    10. Shri S. S. Sanganeria

    11. Shri Sanjay Surekha

    12. Shri R P Agarwal

    13. Shri S. S. Bagaria

    14. Shri Girish Agarwal

    15. Shri Goutam Khanna

    16. Shri Suresh Bansal

    17. Shri Rajiv Jajodia

    18. Shri Bhusan Agarwal

    19. Shri Mahesh Agarwal

    20. Shri Sita Ram Gupta

    21. Shri Ashok Bardeja

    http://www.srma.co.in/mailto:srmakol@srma.co.in

  • Page 3 of 15 19th

    Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

    SRMA STEEL NEWSLETTER

    SRMA

    Steel Re Rolling Mills Association of India

    www.sram.co.in

    SRMA Steel News is a division of Steel Re-Rolling Mills Association of India and takes due care

    in preparing this news. Information has been obtained by SRMA from sources, which it considers

    authentic. However, SRMA does not guarantee the accuracy, adequacy or completeness of any

    information and is not responsible for any errors or omissions or for the results obtained from the

    use of such information. SRMA is not liable for investment decisions, which may be based on the

    views expressed in the News. SRMA especially states that it has no financial liability whatsoever

    to the subscribers/users/transmitters/distributors of this News. And no part of this news may be

    published/reproduced in any form without SRMAs prior written approval.

  • Page 4 of 15 19th

    Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

    SRMA STEEL NEWSLETTER

    SRMA

    Steel Re Rolling Mills Association of India

    www.sram.co.in

    Executive Summary

    Present Scenario of Sponge Iron Industry Environment & Safety Focus

    Taxation News

    Events

    Latest Steel News

    CONTENTS

  • Page 5 of 15 19th

    Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

    SRMA STEEL NEWSLETTER

    SRMA

    Steel Re Rolling Mills Association of India

    www.sram.co.in

    For the period of 2012, India maintained its ranking as the 4th largest steel producing country in the world behind

    China, Japan and the US with a crude steel production of 76.7 million tonnes (MT) representing a 4.3% growth over

    2011. The Indian steel industry continued to showcase trends of higher consumption of finished steel and continued

    to be a net importer on account of increased demand for special grades of steel in the country. India's current per

    capita finished steel consumption at 57 kg is well below the world average of 217 kg. With rising income levels

    expected to make steel increasingly affordable, there is vast scope for increasing per capita consumption of steel.

    The core sector of steel industry tracks the overall economic growth in the long term. Also, steel demand, being

    derived from other sectors like automobiles, consumer durables and infrastructure, its fortune is dependent on the

    growth of these user industries. The Indian steel sector enjoys advantages of domestic availability of raw materials

    and cheap labour. Iron ore is also available in abundant quantities. This provides major cost advantage to the

    domestic steel industry.

    The steel industry of India is largely iron-based through the blast furnace (BF) or the direct reduced iron (DRI)

    route. Indian steel industry is highly consolidated. About 60% of the crude steel capacity is resident with integrated

    steel producers (ISP). But the changing ratio of hot metal to crude steel production indicates the increasing presence

    of secondary steel producers (non integrated steel producers) manufacturing steel through scrap route, enhancing

    their dependence on imported raw material

    The New Industrial policy adopted by the Government of India has opened up the iron and steel sector for

    private investment by removing it from the list of industries reserved for public sector and exempting it from

    compulsory licensing. Imports of foreign technology as wall as foreign direct investments are freely permitted

    up to certain under the automatic route. This, along with the other of the private sector in the steel industry.

    While the existing units are being modernized/expanded , a large number of new/greenfield steel plants have

    also come-up in different parts of the country based on modern, cost effective, state of-the-art technologies.

    The steel industry of India has recorded remarkable performance in recent years. The industry is now capable of

    producing high quality materials to stringent international specifications for high end applications in sectors like

    construction, engineering, automobile and infrastructure. Indian steel products have been well accepted in the global

    market and the countrys export of finished steel crossed the 5 Mt mark in Fy04 at 5.22 Mt. which was about 14.4

    percent of its total domestic production.

    Steel producers across the globe are grappling with low capacity use levels, resulting in a high fixed cost. Indian

    steel producers capacity use contracted to below 80% in FY13. Any increase in the capacity use due to an uptick in

    demand could be limited by significant new capacities (about 13-15 million tonnes), scheduled to start in FY15.

    Domestic steel producers will have to increase their focus on cost competitiveness and efficiency of operations to

    protect their margins.

    Indian economy is poised to grow much faster in 2015. Development, reforms and infrastructure are perceived to be

    ready to take the centre stage. With economy expected to return stronger growth, steel demand is expected to be

    higher to around 5% in the year 2014-15 and potentially around 10% in 2015-16. Leading steel producers in India

    expect to raise production with steel prices to remain stable in 2014 backed by moderating raw material prices.

  • Page 6 of 15 19th

    Issue Steel Re Rolling Mills Association of India visit www.srma.co.in

    SRMA STEEL NEWSLETTER

    SRMA

    Steel Re Rolling Mills Association of India

    www.sram.co.in

    Sponge iron, also known as Direct Reduced Iron (DRI), is a product that

    is produced by subjecting iron ore to a reduction process. Direct reduced

    iron has a slightly higher iron content, which often makes it better suited

    for use in the electric furnace route of steel making.

    Though the industrial application of sponge iron started early in the

    1950s, it could not fulfill industry expectations at that time in being used

    as a supplementary material for feed/ alternative to blast furnaces. The

    main reasons were :

    The gas based sponge iron plants could operate only where inexpensive natural gas was available.

    Sponge iron furnaces could not be developed into a single entity to produce liquid metal.

    Increased scrap availability that was being traded world wide as a furnace RM.

    Blast furnace capacities increased from 0.7 Mt/yr in 1960s to over 4 Mt/yr. Today the largest gas based sponge iron

    module available is approx. 1.0 Mt/yr. However, the environmental requirements and the capital cost required to set

    up new integrated steel plants have their own draw backs. In light of this, coal based sponge iron technology now

    indicates a new direction, particularly for Indian steel making conditions.

    The production of sponge iron in India started about three decades ago triggered by the fact that in the mid-1970s,

    Indian mini-steel plants started examining the viability of setting up sponge iron plant. Since India has adequate coal

    deposits, production of coal based sponge iron was considered a feasible option. The growth of the DRI industry till

    the mid 1980 was slow largely because of restrictive licensing. It was only after de-licensing in 1985 that the

    industry expanded rapidly.

    Production Trend - Sponge Iron production in India witnessed a CAGR of 14.77% during the period 2004 -05 to

    2009-10. However, the growth rate was volatile during that period with 2006-07 recording the highest growth rate

    of around 38%. Production growth is expected to accelerate during 2011 - 13 on account of a strong demand from

    the secondary steel industry, which uses sponge iron for manufacturing steel. According to CMIE, steel production

    is expected to grow by 11 % and 15 %, respectively, during 2011 - 12 and 2012 - 13. As secondary steel sector

    accounts for almost 55% of the total steel production, a strong growth in production of steel is expected to boost the

    demand for sponge iron. Sponge iron production is expected to grow by 14 % in 2011-12 and by 18.4% in 2012-13.

    INDIAN DRI PRODUCTION - FINANCIAL YEAR 2013-14 (Tons)

    1nd Qtr 2nd Qtr 3nd Qtr 4nd Qtr Total

    (April-June) (July - Sept) (Oct - Dec) (Jan - Mar) (April - March)

    A. Gas Based 91045

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