ECONOMIC ANALYSIS OF INDUSTRY
India Steel Industry
Steel Companies in India
The steel industry, in general, is on the upswing, due to strong growth in demand propelled particularly by the demand for steel in China. The world scenario coupled with strong domestic demand has benefited the Indian steel Industry.
[pic][pic]During April-December 2004- 05, production of finished steel recorded a growth of 4 percent over the corresponding period of the previous year to reach 28.3 million tonnes. This growth rate, however, was lower than the growth rate in the preceding two years. Consumption of finished steel grew by 5.9 percent and increased to 24.9 million tonnes, The faster growth of domestic consumption relative to production was reflected in a decline in exports of finished steel (2.6 million tonnes) by 18.2 percent compared to the corresponding period of previous year. World steel prices rose from December 2001 onwards. The price increase of hot-rolled (HR) coils, during January 2002 to December 2004 was from US$ 140 - 175 per tonne to about US$ 550 - 600 per tonne. The prices of steel melting scrap rose from a low of US$ 93 - 94 per tonne to US$ 275 - 285 per tonne.
The increased production of steel has in turn led to rise in prices of raw materials like scrap, coking coal and metallurgical coke. The wholesale price index (WPI) for iron and steel, has increased by 35 percent to 202.1 in 2003-04, and further to 237.8 in the current year up to December 31, 2004.
STEPS TAKEN TO BOOST STEEL INDUSTRY
In budget 2004-05, the customs duty on no alloy steel was reduced from 15 % to 10 per cent and on alloy steel from 20 per cent to 15 per cent. In August 2004, the customs duty on non-alloy steel was further reduced from 10 per cent to 5 per cent; on melting scrap from 5 per cent to 'zero' and on ships for breaking from 15 per cent to 5 per cent.
Further, customs duty on several raw materials used by the steel sector like nonsmoking coal, met coke and nickel has been reduced to 5 per cent and on coking coal to 'zero'.
To bring down the prices of steel, the excise duty on steel products was reduced from 16 per cent to 8 per cent with effect from February 28, 2004 with a caveat that the duty regime will be reviewed. Budget 2004-05 revised this partially by increasing the duty from 8 per cent to 12 per cent, as the intended impact of duty cut on moderating prices was not achieved.
[pic][pic]WHAT IS FURTHER NEEDED
While the increase in the domestic prices of steel because of an increase in international demand cannot be avoided , attention needs to be paid to the problem of adequate and reliable supply of coal to the steel industry. Efforts are required for securing assured linkages of coking coal from overseas sources.
Furthermore, cross-border investment in captive coal mines, especially for coking coal, in major source countries as well as investment for developing coal mines in India, need to be encouraged. Further, the movement of raw materials and finished steel would need good rail and road network as well as substantial improvement in port handling, storage and haulage facilities.
Economic Profile and Trends
Value of Shipments | Annual Production | Labor Productivity
The steel industry provides about 5% of the total U.S. manufacturing GDP. The industry has undergone a major transformation since its recession of the late 1980s, investing in new process and product technologies and closing older mills. Today's steel industry is technologically sophisticated, employing over 189,000 American production workers in jobs paying about 55% above the average for all U.S. manufacturing. The United States is the largest steel producer in the world, producing 112 million tons of raw steel in 2000, 12% of total world production. The industry has recently experienced large levels of imports because of world steel overcapacity resulting from economic downturns in Asia and the CIS. The industry's return on...
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