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Iron and Steel

Industry Summary

  • India is the world's second-largest steel producer with an output of 10.14 MT in October 2021.
  • The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour.
  • In FY22, demand for steel is expected to increase by 17% to 110 million tonnes, driven by rising construction activities.
  • Government's focus on infrastructure development like railways, roads, and housing is a major demand driver.
  • The National Steel Policy 2017 aims to increase per capita steel consumption to 160 kgs by 2030-31.

Value Chain

Step 1

Raw Material Sourcing

Iron ore, Coal/Coke, Limestone mining and procurement

Step 2

Iron Making

Blast Furnace or Direct Reduced Iron (DRI) process

Step 3

Steel Making

Basic Oxygen Furnace (BOF) or Electric Arc Furnace (EAF)

Step 4

Casting & Rolling

Converting liquid steel into slabs/billets and then finished products

Step 5

Distribution

Sales to OEMs, Construction, and Trade channels

Cost Drivers

  • Raw Materials (Iron Ore, Coking Coal)
  • Power and Fuel
  • Freight and Logistics
  • Labour and Overhead

Revenue Drivers

  • Steel Prices (Global and Domestic)
  • Sales Volume
  • Value-added product mix
  • Export incentives

Growth Drivers

  • Infrastructure development (Roads, Railways, Bridges)
  • Automobile sector growth
  • Housing and Real Estate (Affordable housing)
  • Capital Goods and Manufacturing

Key Customers

  • Construction & Infrastructure (60-65%)
  • Automotive
  • Capital Goods
  • Consumer Durables

Key Players

  • Tata Steel
  • JSW Steel
  • SAIL (Steel Authority of India Ltd)
  • Jindal Steel & Power (JSPL)
  • ArcelorMittal Nippon Steel

Channels

  • Direct Sales to Large Consumers (OEMs)
  • Distributor/Dealer Network for Retail
  • Exports