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A Sector Analysis Report


Steel Sector: Risk & Future Insurance potential

INTRODUCTION In De- traiff, it is the leader who decides the rates and others just follow, perhaps, with slight variations." It will be a catch 22 situation for the insurers as they will see premium going down.

If we look at the history of the Insurance industry, major landmark have taken place in every other decade starting from the 1930s till the end of the last century. It was in 1938 the insurance Act setting the rules and regulations for the insurance market was passed, in 1972, the general insurance Nationalization Act was passed nationalizing all general insurance companies and organization them into four subsidiaries of the General Insurance Corporation & finally in 1999, Insurance Regulatory and Development Authority Act was passed opening up the industry to private and foreign participation.

Insurance is a long-term business and takes a while for the market to mature and support the economic growth of the country. But can the Indian market wait for another two decades for development of essential support agencies to take place?

The insurance sector in India has come as full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.\

Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies.

12 general insurers operating in the country eight are private non-life insurers. The insurance industry has been able to attract foreign direct investment (FDI) of up to Rs.1288.44 crore which is one of the highest in the services sector,

The non-life insurance industry has seen 180 per cent growth in these five years, writing a gross premium of Rs18,095.25 crore in 2004-05, up from Rs10,087.03 crore in 2000-01. The private players have come out with innovative products including weather index-based crop insurance policies, health insurance covers, liability products and others."

Steel Sector: Risk & Future Insurance Potential

The Indian insurance industry faces multiple challenges today. One of them is the issue in moving from a traiff to de-traiff market. Best experience is when marine insurance detraiff in 1994 was disastrous for the industry. The general insurance industry then thinks risk management. Premium rates touches low level and all insurance company cant afford such a low level premium.

The reason is at that time Indian market does not have reliable, sufficient and detailed data required for actuarial analysis and pricing. Preferred rating would not be possible. Thus client, with a claim free track record are clubbed with those having a poor claim record. In a growing competitive environment, can Insurer afford to offer to offer a uniform to all? Growing insurance awareness bring with it a discerning insurance public who do not accept the one rate fits all policy any longer.

The market is getting fragmented, with entry of new insurance provider. As far as the private insurer are concerned, at this stage their premium turnover is too small to base any actuarial exercise. Collecting & collating all data for analysis at the time of detraiffing steel and other sector is extremely time consuming, difficult and expensive. The private players are excited about detariffing, regardless of its multiple impacts on their top and bottomlines. In a free pricing regime, the premium rates are expected to fall. This in turn would reduce the fund availability for investments.

The other whammy is the increase in brokerage and agency commissions. Currently, the brokerage and agents commission in the case of non-tariff business is 17.5 per cent and 15 per cent respectively, and in the case of tariff business it is 12.5 per cent and 10 per cent respectively. When the rates are freed, payments to intermediaries will go up.

One sector that has benefited immensely from liberalisation is the corporate sector. Competition has resulted in premium rates going down. While the corporates are enjoying the benefits, individual policyholders haven't seen too much improvement, in terms of premium rates as well as claims settlement.

Players will focus more on market share than on profitability. This can be done through better risk profiling, as well as learning more about the risks through risk inspections and data warehouses."

Steel Sector: Risk & Future Insurance Potential

Our own experience and detailed study in any sector helps to face this situation. This helps in better pricing, Improved market segmentation, optimum reserve creation for unexpired risks and assist in product design. This saves the our company valuable resources and time.

In de-traiff market winner are those, who have ability to respond suitably to the dynamic of the market, meeting regulatory, statutory and legal requirement could be possible with the least turnaround time. A base product can be converted a vanilla product if we understand all risk and company specific requirements.

In de-traiff market insurance business cannot succeed without access and use of authentic, detailed and lots of underwriting, claim data & industry specific requirement. That is a pre-requisite before a successful move to a de-traiff regime can be contemplated.


India has a long heritage of iron and steel making. The journey started in ancient times and through the ages this evolved and matured into a vibrant and modern industry at par with the best in the world. The iron and steel industry in India started nearly 100 years ago in Jamshedpur. The Tata Iron and Steel Company (TISCO), started under the aegis of the pioneering Indian entrepreneur Sir Jamshedji Tata had been the icon of the nationalistic pride during the colonial period. The steel sector was one of the primary vehicles of economic development in independent India. India is endowed with essential raw materials such as iron ore and coal. The industry has widespread forward and backward linkages with the rest of the economy. The founding fathers of India s Five Year Plans treated this as a priority sector and the industry rose to commanding heights of the economy through

Steel Sector: Risk & Future Insurance Potential

large-scale capacity creation in the public sector. Since then it has passed through various phases of changing domestic and external policy environment. The industry as a whole has responded to the emerging compulsions of the changing times. It has survived well with its impressive array of achievements. In the initial years of economic planning the State stepped in as a regulator and a guide to reconcile the interests of the producers and consumers of this vital economic input. It also protected the industry from the vagaries of the international market. The change came in the last decade of the 20th century with the liberalisation of the Indian iron and steel industry. The environment of globalization and competitive market orientation combined well with the formidable legacy of a rich experience in the art and craft of steel making acquired over four decades of controlled growth. The industry responded magnificently to the opportunities provided by the new policy regime. The private sector led the resurgence from the front. The decade following the deregulation of the Indian steel sector saw the largest additions to capacity. The new entrepreneurs also showed extreme pragmatism and foresight in the selection of technology. As a result, the Indian steel industry today can boast of some of the latest in the state-of-the art technologies in use globally. The post-deregulation Indian iron and steel industry adopted modern technologies and varied product categories. In these years, the industry both in the public and the private sectors saw impressive gains in efficiency of resource use and productivity.

Steel Sector: Risk & Future Insurance Potential

The most remarkable achievement of this decade has been a rapid integration of the Indian steel industry with the global market. The quantum jump in exports from India bears witness to that. Globalization has led to manifold expansion in the marketing opportunities for the Indian producers and India has emerged as a net exporter of steel. Production for export has become an integral part of the profit-maximizing and loss-minimizing business calculations of the Indian corporate. The producers can now source their inputs, both physical and financial, from the least cost source beyond the boundaries of the national economy. The performance of the Indian steel industry during the last decade, though spectacular, has not been altogether smooth. The euphoric developments in the first few deregulation years were cut short when deceleration set in from the autumn of 1997. The external global environment worsened progressively under pressure from a series of financial meltdowns in various parts of the world while our domestic economy also stagnated. Prices started falling continuously even as the world steel industry strained under conditions of extreme oversupply and cut-throat competition. The domestic market also dwindled on the back of slow growth in construction and other forms of capital formation/investment. Most worrying was the threat posed by narrow national interests which misused the WTO. Non-tariff barriers imposed on the Indian exporters of steel bear ample witness to this predilection. There has been some respite in the last few months with some firming up of domestic and international prices. Prices have risen as a result of improved demand conditions at

Steel Sector: Risk & Future Insurance Potential

home and abroad and also because of some rationalization of capacities across the globe, though on a limited scale. The industry now looks ahead with a new resolve and determination. Deregulation endows the producers with the freedom to take their own business decisions, but at the same time, it devolves a great deal of responsibility. These include the responsibility to maintain quality standards to remain cost and price efficient and, above all, to meet the consumers demand as best as possible. Globalization has

its opportunities and dangers. Reaping the benefits of a globalized market calls for utmost vigilance from all the stake-holders the producers, the consumers and the State. The industry must be able to capitalize on the opportunities and mitigate the dangers of synchronized global downturns. This must be done in association with the consumers and the state machinery. At the present juncture, one can say that the industry has successfully made the transition from a controlled to a market-driven economic environment. The future of this industry is grounded in its past and its present. Now, there are signs of revival both in the domestic and international steel market. Steel prices and demand have gone up as a result of increased spending on construction and consumer durables both at home and in South East Asia, Japan, the USA and some parts of the Euro zone. There has been some cut back on capacity world wide and this has helped in restoring the supply-demand balance to some extent.

Steel Sector: Risk & Future Insurance Potential

The Indian producers have been alert enough to detect cases of violation of their trading rights within and outside their national boundaries. The industry helped by the official machinery has moved the available international bodies to seek redressal. It is also constantly striving to better its performance in every sector. As a result, the Indian steel industry has grown not only in competence but also in confidence. It looks ahead with a resolve to carry the journey which started 100 years ago towards a pinnacle of greater glory.

OVERVIEW OF STEEL MANUFACTURING PROCESS Plant where steel manufacture integrated steel plants and mini steel plants.

Integrated steel plants are large factories with a complex structure and a broad range of products. They comprise blast furnaces, basic oxygen steel plants, and continuous casting plants, with downstream plants such as hot and cold rolling mills and surface-coating plants. They are designed for high levels of output. Mini steel plants are less complex in structure and their range of products is usually limited. Scrap steel, sponge iron from direct reduction plants, or pig iron from smelting reduction plants is processed in an electric-arc furnace. The steel is cast in a continuous casting plant. Downstream plants include relatively simple rolling mills.

Steel Sector: Risk & Future Insurance Potential

Layout of steel plant

1 Coal 2 Fluxing agents 3 Iron ore 4 Coking plant 5 Blast furnace 6 Direct reduction plant 7 Alloying addition 8 Oxygen 9 Fluxing agents 10 Scrap

Steel Sector: Risk & Future Insurance Potential

11 Converter 12 Ladle furnace 13 Mould 14 Continuous casting plant

The figure shows a flowchart of the integrated manufacturing process for iron and steel using the blast furnace and basic oxygen furnace (denoted BF and BOF hereinafter, respectively), which is presently the most commonly used method (51% of world steel production). After the BF-BOF process, molten steel is controlled to a target composition and temperature and is then cast by continuous casting machine to produce slabs, blooms, and billets. These castings are rolled to the required dimensions by the rolling mill to produce steel products. The smelting and refining process for iron and steel in the BF-BOF process involves the carbon reduction of iron ore (Fe2O3) in the BF to make molten iron, and decarburization of molten iron in the BOF to make molten steel.

Major reducing agent in the BF is the carbon monoxide gas(CO) generated by the oxidation of the carbon(C) in coke. Consequently, carburization takes place at the same time as reduction, producing hot metal(molten iron) containing about 4% carbon. The hot metal is decarburized to the required carbon content in the BOF. The main reaction in this process is the oxidization of the carbon in the hot metal by both pure oxygen gas (O2) and iron oxide (Fe2O3). The residual oxygen, after contributing to this decarburization reaction, remains in the molten steel. This oxygen is fixed and removed by deoxidation reagents such as silicon and aluminum as SiO2 and Al2O3 or is removed as carbon monoxide gas in the subsequent vacuum degassing process. In addition to the BF-BOF process, there is another process which utilizes mainly scrap as an iron source, with some direct reduced iron whenever necessary. The direct reduced iron is produced by reducing iron ore with reformed natural gas, whose principal components are hydrogen, carbon monoxide, and methane. The scrap, along with direct reduced iron, is then melted in an electric arc furnace (denoted EAF hereinafter) to produce molten steel which is subsequently processed by the continuous casting machine, as mentioned above.

The molten steel from the BOF and EAF is then deoxidized and alloying elements are added in the prescribed amounts. The molten steel is then held at the target temperature and continuously cast, and the castings obtained are cut to the prescribed length. After heating to

Steel Sector: Risk & Future Insurance Potential

the rolling temperature in a reheating furnace, these castings are hot-worked to the required products. Steel shapes, bars, and wire rods are worked on section and bar mills and wire-rod mills equipped with caliber rolls, plates are worked on reversing mills, and hot-rolled steel sheets are worked on hot strip mills. After pickling to remove scale from the surface, the hotrolled steel sheets are worked to cold-rolled steel sheets on reversing mills or tandem rolling mills, and the cold-rolled steel sheets are tinned or galvanized as required to produce various surface-treated steel sheet products. Steel pipe is produced by forming and welding steel sheets or plates, or by piercing a billet and rolling to the final dimensions without a seam. Among the elements composing the crust of the earth, iron exists in the largest quantity next to oxygen, silicon, and aluminum. Iron exists as natural ores in the form of oxides, and the estimated amount of ore deposits in the world is approximately 800 billion tons. Typical ores are hematite (Fe2O3) and magnetite (Fe3O4), having theoretical iron contents of 70% and 72%, respectively. The iron content of practical ores is about 65% at maximum, and these ores include 2-6% silica and 1-3% alumina (Al2O3). Iron ore & its pretreatment In the smelting process for iron and steel, coke serves as the source of carbon, which works as a reducing agent when reducing iron ore in the BF. At the same time, coke acts as the heat source for heating and melting the charged materials. Coke is made by baking coal in a coke

Steel Sector: Risk & Future Insurance Potential

In the coke oven, the raw coal obtained by crushing and blending is charged into the coke chamber, where it is then baked (carbonized) by indirect heating at 1,473-1,573K (1,2001,300 ) for 14-18 hours to form coke that contains about 90% fixed carbon. The coking process also produces such by-products as gas, coal tar, and pitch which can be refined and treated into useful secondary products such as fuel gas, pure hydrogen gas, chemical products such as benzene, toluene, xylene, naphthalene, dye, and carbon fibers.

Coal & Coking The blast furnace (BF) has a vertical cylindrical structure externally covered with a shell of thick steel plate and internally lined with refractories. The refractory structure is cooled by water-cooled metal components called staves, which are embedded between the shell and the refractories. The furnace body is composed of (i) the shaft, which tapers outward from the top, (ii) the belly, which is a straight cylinder, (iii) the bosh, which tapers inward toward its bottom and is located immediately under the belly, and (iv) the hearth, at the bottom of the furnace. The shaft, belly, and bosh are usually lined with chamotte brick and silicon-carbide brick, and the hearth is lined with carbon brick. Depending on the size of the furnace, the side wall of the hearth is radially fitted with some 20 to 40 of water-cooled copper tuyeres, which are used to inject the hot blast into the furnace from the hot stoves through the hot-blast main and bustle pipes. Tapholes for discharging hot metal and cinder notches for discharging slag are also installed in the hearth section. The largest BFs at present are about 80m in total height, with a furnace body height of about 35m and a maximum internal diameter of about 16m, and have an internal volume of about 5,200m3. A furnace of this size can produce approximately 10,000 tons of hot metal a day. All BFs have auxiliary equipment such as (i) belt conveyors for transporting raw materials (ore and coke) to the furnace top, (ii) hoppers for temporarily storing these raw materials, (iii) a bell-type or bell-less-type device for charging the raw materials into the furnace with appropriate distribution in the radial direction, (iv) hot stoves for heating the blast, (v) blowers for feeding the blast, and (vi) equipment for dust removal, and recovering and storing the gas from the furnace top. Blast furnaces in which pulverized coal is injected from the tuyeres (PCI = pulverized-coal injection) are provided with equipment for pulverizing the coal and feeding it under pressure. With bell-type charging equipment, the raw materials enter the furnace through the gap created by moving down a small inverted bell. This bell closes and a larger bell (big-end-down) opens to allow material to fall into the shaft below.
Steel Sector: Risk & Future Insurance Potential

With bell-less charging equipment, the raw materials are dropped into the furnace through a rotating chute. The hot stove is a cylindrical furnace about 12m in diameter and some 55m in height, and has a chamber filled with checkered silica bricks. The hot stove is a type of heat exchanger in which the heat produced by combustion of the BF gas is stored in the checkerwork chamber, after which cold air is blown through the hot checker-work to produce the preheated hot air blast to the furnace. Two or more stoves are operated on alternate cycles, providing a continuous source of hot blast to the furnace. A BF is usually operated with a furnace-top pressure of about 250 kilopascals. To recover the energy from the large volume of high-pressure exhaust gas, the BF is equipped, after dust removal, with a top-pressure recovery turbine (TRT), for generating electric power by utilizing the pressure difference between the furnace-top and gas storing holder.

Blast Furnace Facility A total of about 1,600 kg/ton-hot metal of such iron-bearing materials as sintered ore, lump ore and pellets, and about 380 kg/ton-hot metal of coke as the reductant are charged in

Steel Sector: Risk & Future Insurance Potential

alternate layers from the top of the BF. It has recently become common practice to inject usually 90-120 kg/ton-hot metal of pulverized coal as part of the reductant from the tuyeres in the lower part of the furnace. At present, heavy-oil injection from the tuyeres is rarely used for economic reasons. Approximately 1,000 Nm3/ton-hot metal of hot blast is also blown through the tuyeres after preheating to 1,423-1,523K (1,150-1,250 ) at the hot stoves. The humidity and oxygen concentration of the hot blast are also controlled. The hot blast reacts with the coke and pulverized coal in the belly and bosh of the BF to form a mixture of carbon monoxide and nitrogen. This mixture ascends in the furnace while exchanging heat and reacting with the raw materials descending from the furnace top. The gas is eventually discharged from the furnace top and recovered for use as fuel in the works. During this process, the layer-thickness ratio of iron-bearing materials to coke charged from the furnace top and their radial distribution are controlled so that the hot blast can pass with appropriate radial distribution. During the descent of the burden in the furnace, the ironbearing materials are indirectly reduced by carbon monoxide gas in the low-temperature zone of the upper furnace. In the lower part of the furnace, carbon dioxide, produced by the reduction of the remaining iron ore by carbon monoxide is instantaneously reduced by coke (C) into carbon monoxide which again reduces the iron oxide. The overall sequence can be regarded as direct reduction of iron ore by solid carbon in the high-temperature zone of the lower furnace. The reduced iron simultaneously melts, drips, and collects as hot metal at the hearth. The hot metal and molten slag are then discharged at fixed intervals (usually 2-5 hours) by opening the tapholes and cinder notches in the furnace wall. The materials discharged from the BF are hot metal at 1,803K (1,530 ), about 300 kg/ton-hot metal of molten slag, and dust-bearing exhaust gas discharged from the furnace top. Hot metal is poured into a torpedo car, where it is subjected to hot metal pretreatment, and then transferred to the steel making plant. Molten slag is crushed after cooling and is recycled as a material for roadbed and cement. After dust removal, the exhaust gas is used as a fuel for the reheating furnaces. Hot Metal Pretreatment process

Steel Sector: Risk & Future Insurance Potential

The basic oxygen furnace (BOF), whose profile is shown in the figure, is a tiltable vessel lined with refractories such as magnesia carbon brick. Auxiliary equipment includes a chute for scrap charging, hoppers for alloys and fluxes, a lance for injecting pure oxygen gas, a sublance for measuring the temperature and carbon concentration of the molten steel, lifting devices for the lance and sublance, equipment for tilting the vessel, and equipment for recovering and cleaning the exhaust gas. The BOF capacity is expressed as the weight of crude steel that can be decarburized per heat. The main function of the BOF is to decarburize the hot metal using pure oxygen gas. In the top-blown BOF, pure oxygen is injected as a high-velocity jet against the surface of the hot metal, allowing penetration of the impinging jet to some depth into the metal bath. Under these conditions, the oxygen reacts directly with carbon in the hot metal to produce carbon monoxide. The pure oxygen top-blown BOF can decarburize 200 tons of hot metal from 4.3% C to 0.04% C in about 20 minutes. As a result of this high productivity, the BOF replaced the open hearth furnace, which was a much slower process. Reduction Process Heating in an electric furnace is made by electric energy. Raw ferrous materials consist mostly of scrap, some cold pig iron and DRI. For this reason, the electric furnace plays an important role in the recovery and recycling of waste iron resources. In areas where an abundant supply of scrap and electric power are available, the proportion of steel making via

Steel Sector: Risk & Future Insurance Potential

the electric furnace route is relatively high, because both energy consumption and equipment investment are substantially smaller than via the integrated route using a BF and BOF to produce steel from ore. Electric furnaces are classified as arc furnaces or induction furnaces, according to the heating method. The arc furnace is used far more extensively for steel making because its capacity is large and production efficiency is high. DC Electric Arc Furnace The production of high-grade steel, refining under vacuum was initially introduced to remove such gas components as hydrogen before casting the molten steel tapped from the converter. This is called vacuum degassing because the gas components in the molten steel are removed by reducing the balanced partial pressures during and after pouring the molten steel into a reduced-pressure vessel. The functions of temperature control, final refining, and composition control were subsequently added to the secondary refining equipment because the function of the converter is increasingly concentrated on decarburization, and further reductions in impurity elements and nonmetallic inclusions should therefore be performed by other means. The allowable ranges of target temperature and composition have also become tighter requiring fine tuning. Thus, secondary refining has recently become the standard process for producing high-grade steels. The most important functions of secondary refining are final desulfurization, degassing of oxygen, nitrogen, hydrogen, etc., removal of inclusions, and final decarburization for ultra-low carbon steel.

Steel Sector: Risk & Future Insurance Potential

Desulfurization is conducted by adding CaO, Na2CO3, CaF2, etc. in a similar manner to that used in the hot metal pretreatment process. Denitrification and dehydrogenation are achieved by treating the molten steel under reduced pressure in a vacuum vessel. Deoxidation is conducted by adding silicon and aluminum to the molten steel to form nonmetallic inclusions of silica (SiO2) and alumina (Al2O3), which are coagulated by stirring the molten steel for enhanced flotation. These are then absorbed into the top slag and removed. Additional decarburization, if required, is carried out by blowing pure oxygen gas onto or into the molten steel in the vacuum vessel to remove the carbon as carbon monoxide. Secondary refining equipment typically used in the mass production of high-purity steel at integrated steel mills includes the RH (Ruhrstahl-Hausen) vacuum degasser and LF (ladle furnace). The RH equipment injects argon gas into one (suction tube) of the two tubes (snorkels) immersed in the molten steel in the ladle, and the molten steel in the ladle is drawn through the suction tube into the vacuum vessel by the operation of air-lift pumping. After being exposed to the vacuum in the vessel, the molten steel flows back into the ladle through the down snorkel. Since the recirculation rate is relatively high, the RH process is suitable for rapid degassing of a large amount of molten steel. The refining functions of the RH process have also been expanded. For example, decarburization and heating-up are conducted by injecting pure oxygen gas, while the desulfurization and deoxidation rates are increased by adding fluxes, both onto or into the melt in the vacuum vessel. On the other hand, the LF
Steel Sector: Risk & Future Insurance Potential

equipment offers strong heating functions, permits the addition of a large amount of alloys, and enables precise temperature control. It also provides outstanding desulfurization by hightemperature treatment with reducing fluxes and the removal of deoxidation products. The LF process is therefore often used for the secondary refining of alloy steel.

UPCOMING STEEL PROJECTS IN INDIA National Steel Policy The Government has announced the National Steel Policy (NSP) in early November, 2005. The policy envisages a compounded annual growth rate (CAGR) of 7.3 percent per annum in the steel sector up to 2019-20. To achieve this, the NSP aims to increase indigenous production from 38 Mt level of 2004-05 to about 110 Mt by 2019-20, through multipronged strategy. The focus of the NSP would be to achieve global competitiveness, not only in terms of cost, quality and product-mix but also in terms of global benchmarks of effiency and productivity. The government proposes to create incremental demand for domestic consumption of steel through promotional efforts, awareness drives and strengthen then delivery chain, particularly in the rural areas. The justification is that the growth rate of steel for the past 15 years has been 7 percent per annum. The proposed increase will compare well with the projected income growth rate of 7 to 8 percent, given an income elasticity of steel consumption around one. According to available estimates, the NSP mentions, that domestic consumption of steel in India stood at 31 Mt in 2003 - 04. Bringing production up to 110 Mt would, therefore, mean a domestic consumption of 90 Mt. The urban percapita consumption is expected to go up from the present level of 77 Kg to 165 Kg in 2019-20 at a CAGR of 5 percent while in the rural areas, the consumption is slated to double from 2 Kg to 4 Kg at a CAGR of 4.4 percent.

A ressume of the greenfield projects is presented below Tata Steel at Jamshedpur, Jharkhand Tata Steel is setting up a 12 Mtpy capacity steel plant near the existing steel plant in Jamshedpur at cost of Rs. 42.000 crore.

Tata Steel In Orissa

Steel Sector: Risk & Future Insurance Potential

Tata Steel is setting up a six million tpy capacity steel plant at Kalinganagar in the Jaipur district of Orissa. The proposed project will involve an estimated investment of Rs. 15,400 crore and will be completed in two phases of three million tpy each.

Tata steel In Chattisgarh Tata Steel is planning to install a 5 Mtpy capacity integrated steel plant in the Baster region of chattisgarh at a cost of Rs. 15,000 crore. In the first phase,

Essar Steel In Orissa Essar Steel Ltd. is setting up a 4 Mtpy capacity steel complex at Paradip in Orissa at an estimated cost of Rs. 10,000 crore.

Essar In Chattisgarh According to a report in Metal Bulletin (6/7/05), Essar Steel Chattisgarh, a subsidiary of Essar Steel, has signed a MoU with the Chattisgarh Government to build a 3.2 Mtpy capacity integrated steel plant in the Baster district of the state at a cost of Rs. 60 billion.

Ispat In Orissa The Ispat Group is planning to set up a 5 Mtpy capacity steel plant of Paradip in Orissa. Ispat has requested the Orissa Government for a 240 Mt of iron ore reserve for 30 years for building the project.

Tata - Blue Scope JV In Jharkhand The new joint Venture Company in India between Tata Steel and BlueScope of Australia will set up a 250,000 tpy of metallic coating facility and a point line capacity of 150,000 tpy. The plant will be set up at Bara in Jamshedpur and is expected to be operational by 2008. The capital cost would be about Rs. 1400 crore. The two companies will have a 50:50 share in the joint venture project.

Bhushan Steel & Strips in Orissa BSSL has planned to set up a 1.2 Mtpy capacity hot strips plant along with a 300 MW captive power plant at Lapanga in the Jharasguda district of Orissa. The first phase of the project will involve an investment of Rs. 16502 crore. A further investment of Rs. 1850 crore in the second phase will take the capacity of the plant to 2.8 Mtpy by 2007.

Jindal Stainless Ltd. In Orissa (JSL)

Steel Sector: Risk & Future Insurance Potential

JSL has signed a MoU with the Orissa Government for setting up a 1.6 Mtpy capacity integrated steel plant along with a 500 MW capacity captive power plant at Kalinganagar in the Jaipur district of Orissa. The project will be set up in Phases and the total cost involved will be USD 9.5 billion.

JSPL in Orissa Jindal Steel and Power Ltd. (JSPl) has signed a MoU with the Orissa Government for setting up a a 2 Mtpy capacity steel plant, a 8,000 tpy ferro alloys plant a 200 MW capacity captive power plant in the Angul area of Orissa. The integrated project will involve an investment of Rs. 4000 crore.

JSPL in Jharkhand Jindal Steel & Power Ltd (JSPL) has signed a memorandum of understanding (MoU) with the Jharkhad Government to set up a 5 Mtpy capacity integrated steel plant and a 1000 MW capacity captive power plant at an investment of about Rs. 11,500 cr.

Murrugappa Plant In Orissa Tube investments of the Murrugappa Group based in Chennai has signed a MoU with the Orissa Government for the installation of a 2.5 Mtpy capacity steel plant at an investment of Rs. 6000 Cr.

NINL in Orissa Neelachal Ispat Nigam Ltd. (NINL) is planning to set up a 1 Mtpy capacity steelmaking facility at Kalinganar in Orissa. The steel project is scheduled to be completed by 2007- 08 and involves an have a bar and rod mill to produce quality wire rods, reinforcement bars and billets.

MSP Metalliks is setting up an integrated steel plant near Jharasguda in Orissa. plant. A cumulative investment of Rs. 260 crore is envisaged for the project.

VISA steel in Orissa VISA steel will invest Rs. 1600 crore for setting up a special steel plant at Kalinganagar in Orissa.

Vedanta Resources in Orissa

Steel Sector: Risk & Future Insurance Potential

Vedanta Resources is planning to set up a 5 Mtpy capacity steel plant in Orissa at an investment of Rs. 12,000 crore.

Sunflag Iron & Steel in Orissa Sunflag Iron & Steel Ltd. is setting up a 1 Mtpy capacity steel plant in the Sambalpur district of Orissa at an investment of about Rs. 1000 crore.

SPS Sponge Iron In Orissa SPS Sponge Iron is investing Rs. 400 crore for installing a sponge iron / steelmaking plant in the Jharasguda region of Orissa.

Ispat Godawari in Chattisgarh Ispat Godawari has siged a MoU with the chattisgarh Government for implementing an integrated iron and steel plant at an investment of Rs. 493 crore. Aryan Ispat & Power Plant in Chattisgarh Aryan Ispat and Power has signed a MoU with the Chattisgarh state IDC to set up an integrated steel complex in Chattisgarh at an investment of Rs. 860 crore.

SRMB Srijan Plant in West Bengal SRMB Srijan is setting up a 100,000 tpy steel plant at Durgapur in West Bengal at an investment of Rs. 100 crore. The plant will manufacture TMT bars, billets and structurals.

Ullas Steel in West Bengal Ullas Steel will set up a 100,000 tpy MS ingot and alloy unit at Kadasole in the Bankura district of West Bengal at an investment of Rs. 150 crore.

Shyam Steel in West Bengal Shyam Steel Ltd. is setting up a plant at Durgapur in West Bengal at an investment of Rs. 110 crore for a 10 MW waste heat based captive power plant, a 100,000 tpy capacity sponge iron unit and a steel rolling mill.

Foreign Steel Players in India A MoU has been signed between the Orissa Government and POSCO of South Korea, the Korean major and the fifth highest steel prodcer of the world. The 12 tpy steel plant wil be built at an investment of Rs. 52,000 crore and will be located at the port town of Paradip in Orissa.

Steel Sector: Risk & Future Insurance Potential

Mittals In Jharkhand Mittal Steel, the worlds largest steelmaker, has signed a memorandum of understanding (MoU) with the Jharkhand Government to set up a 12 Mtpy capacity steel plant at an investment of Rs. 400 billion to mine iron ore and build the steel plant. The plant will be built in two phases of six million tonnes each. The first phase of the project is likely to be commissioned by 2010.


The state wise distribution of number of Sponge Iron units in India are furnished in Table

Steel Sector: Risk & Future Insurance Potential

New units / Expansions SAIL is planning to set up a sponge iron unit at one of its four major ISPs. Mecon is preparing the feasibility report.

MSP steel will set up two sponge iron plants in Chattisargh and Orissa (i) It will install a 350 tpd coal based sponge iron plant and a 12 MW captive power plant at Raigarh in Chattisargh in two phased. The first phase may be completed by mid 2006. (ii) MSP will also set up a 300tpd coal based sponge iron plant and a 12 mw captive power plant at Jharasguda in Orissa. The project will be completed in two phases.

Essar Steel Ltd. has already commissioned the 4th DRI module of one Mtpy capacity at Hazira. Technology for the hot DRI was developed in-house. The sponge iron capacity of the company now stands at 3.4 Mtpy.

Tata Sponge Iron Ltd. has undertaken capacity expansion of sponge iron from 240,00 tpy to 390,000 and an increase in power generation capacity from 7.5 MW to 26 MW with an investment of Rs. 170 crore at Deongarh Bilaipara in the Keonjhar District of Orissa. Completion of work is scheduled by the first quarter of 2006.

Visa Industries Ltd. is setting up a DRI plant and captive power plant of 120 MW capacity in connection with the installation of its 1.5 Mtpy integrated steel plant at Kalingangar industrial area in the Jajpur district of Orissa.

Real Ispat is setting up a 2x100 tpd sponge iron plant at Raipur in chattisgarh state with an investment of Rs. 65 crore.

Steel Sector: Risk & Future Insurance Potential

Mahesh Sponge Iron & Power Ltd. is planning to install a 30,000 tpy sponge iron plant at Belgal in the Bellary district of Karnataka.

Ispat Domodar is planning to set up a 200,000 tpy sponge iron and a 300,000 tpy pig iron plant at Nethuria in the purulia district of West Bengal at an investment of Rs. 110 crore.

Vistar Venture has announced plans to set up a 100 tpd sponge iron plant a Dharwad in Karnataka at an investment of Rs. 16 crore.

Shyam steel Ltd. is setting up an integrated steel plant at Durgapur in West Bengal. The company is investing Rs. 110 crore for setting up a 100,000 tpy sponge iron plant rolling mill, 110,000 tpy billet unit and 10MW waste heat based captive power plant.

Navbharat Group of Industries is planning a 100,000 tpy coal-based sponge iron plant at Raipur in Chattisargh at an investment of Rs. 75 crore.

Scaw Industries Ltd. will set up a 0.1 Mtpy capacity coal-based sponge iron plant in the Dhenkanad district of Orissa in phase I and has plans for another 0.45 Mtpy plant in Phase-II

Sundar Ispat is setting up a 100 tpd coal-based sponge iron plant at Mehaboobnagar in Andhra Pradesh. The company intends to reach an ultimate capacity of 300 tpd by mid 2006.

Druvdesh Metal Steel is setting up a 30,000 tpy coalbased sponge iron plant at Koppal in the Bellary district of Karnataka


The State of Jharkhand is witnessing unprecedented growth of the DRI mainly sponge iron. The endeavors of various organizations related to the Sponge Iron are categorized in four variants viz : 1. Category A : Existing Units

Steel Sector: Risk & Future Insurance Potential

2. Category B : Units Under Construction 3. Category C : Expansion Schemes 4. Category D : Mega Proposals The state has operating kilns having 1.80 lakh tonness annual capacity Category A) and ten companies with cumulative annual capacity of 4.63 million tonness is under various stages of construction (Category B).(2005 Dec.)

In addition the expansion of the capacities of at least four major operators have already left the drawing and are under various stages of financial back ups. This capacity amounts to 8.51 lakh tonness/per annum. (Category C) There are seven serious proposals being pursued by major players. The cumulative capacity of these proposals is about 30.70 lakh tonness per annum (Category D).

Steel Sector: Risk & Future Insurance Potential

The National Steel Policy has visualized market demand of finished steel of 60 Mt by 201112. If all the announcement of expansion of capacities by the existing producers and installation of new steel plants take shape, India is expected to produce about 70/80 Mt of crude steel by 2011-12.

Steel Sector: Risk & Future Insurance Potential

RISK & LOSS PREVENTION IN STEEL SECTOR Fire Insurance in steel Sector

In steel industry blast furnaces, electric furnaces, open hearth furnaces, and basic oxygen furnaces all hold several hundred tons of molten metal, major fire damage could result if this molten metal comes in contact with: combustible construction (roofs, floors, walls of the building which contains the furnace, or adjacent control rooms of sheds); flammable or combustible hydraulic oils (from exposed hydraulic oil lines and reservoirs used to tilt the furnace); or ordinary combustibles in the vicinity (exposed electrical cables, wood pallets, scrap lumber, or empty paper bags which held furnace materials that may, inadvertently, have been thrown into the furnace pit area).

Steam or gas turbine-generators and large capacity compressors may suffer machinery breakdown, while dust accumulations on cable trays may cause collapse or electrical damage. In regard to Business Interruption, bottlenecks are found primarily on main transformers, arc furnaces, or ladle furnaces. Replacement time for a furnace is generally estimated at 18 months, while 9 months is required to replace hydraulic oil control and casting lines. The loss of critical control rooms, electrical rooms, coal conveyors, or junction towers can also generate relatively long Business Interruption periods.

Ferrous scrap can contain shielded isotopes such as Cs 137 and Co 60. Accidental introduction of this material to the process will contaminate the finished product in addition to the machinery and equipment. Clean-up costs for such accidents can be large, and lead to a significant interruption of business.

In rolling mills, sprinklers are often needed in rooms housing the lubricating oil systems, as well as large electrical rooms, cable tunnels, and cable cellars. Gaseous extinguishing systems are usually recommended in non-occupied rooms, such as small electrical rooms, as well as concealed spaces with relatively high combustible loading. These areas include false floors and ceilings containing a high density of cables with combustible insulation. Detection alone is generally recommended in concealed spaces with relatively low combustible loading, and in normally occupied areas, such as control rooms. In addition, it is strongly recommended to adequately seal cable and duct penetrations through walls and floors in order to prevent fire spreading from one area to another.

Steel Sector: Risk & Future Insurance Potential

The level of detection or protection required depends on the continuity of combustibles, the combustible loading, and the congestion (access and visibility factor) within the process units. This should be investigated on a caseby- case basis during field surveys. Some of the major potential hazards facing the steel industry include molten metal spills and metal escape, molten metal explosions caused by injection of water, and subsequent fires caused by these events. Adequate drainage and retention facilities should be provided in order to mitigate the damage.

The use of non-combustible construction materials and the protection of critical steel structural members with refractory covering;

no allowance for water accumulation, and drainage if needed; and regular thermography analysis of the furnaces and electrical equipment.

Adequate formalized contingency plans should be developed for critical utilities, critical electrical rooms, Motor Control Center rooms, control rooms, main conveyors, and junction towers. This contingency plan should include all internal and external back-up capabilities, in order to mitigate the Property Damage and Business Interruption loss.

The large loss potentials in the steel industry are those associated with the furnaces and rolling mills. Blast and steel making furnaces present explosion and molten metal spill hazards, some of them also present the risks associated with fuel firing. Rolling mills include the hazards associated with large motors and gear drives, and combustible cooling, hydraulic and rolling fluids. Most equipment in the steel industry is very expensive and can take a long time to replace. Furthermore, environmental regulations often require older equipment to be upgraded. For these reasons, both the property and the business interruption portions of a loss can be huge. Therefore, it is important for a steel processing facility to install adequate protection systems for all hazards and implement extensive loss prevention programmes.

Steel Sector: Risk & Future Insurance Potential

Figure 1 shows the Industrial Risk Insurers (IRI) steel industry losses over USD 1 million in 1975 1995. Furthermore, Figure 2 clarifies the property damages losses and business interruption losses over USD 1 million split by peril. (Reference: GE Global Asset Protection Services)

common hazards and assumptions for probable maximum loss (PML) and maximum foreseeable loss (MFL) scenarios are described. PML describes a loss scenario under reasonably adverse conditions in conjunction with a single failure situation; either mechanical, electrical, process, human element or other. MFL describes a loss scenario under severely adverse conditions in conjunction with ineffective passive protection mechanisms.

Raw material handling and preparation

Coke is a key ingredient of the iron making process and responsible for the iron-oxide reduction in the blast furnace. Coke is produced by destructive distillation of coal at high temperatures in a coke oven. Limestone is a low hazard product. It is crushed and screened to the required size for the blast furnace and then transported via conveyor belt or other means of transfer to the furnace loading area. Fire, explosion, machinery and other hazards The fire protection concerns involved in coke production are the same as at any other coal handling operations. Depending on the origin of the coal, it might be necessary to reshuffle coal from time to time to prevent self-ignition. If the coal comes from colder regions, especially in the winter, it might be necessary to crack frozen coal blocks using open flames or other heating sources. Routine safety management tasks like housekeeping and hot work supervision programmes are commonplace. Combustible materials on primarily combustible transportation belts are also cause for concern. The mostly high and long ore transport bridges are susceptible to windstorm losses. Pollution control systems and by-products plants, generally chemical facilities with risks associated to dust, light oil and ammonia handling, are also hazardous areas. Coke ovens depend on large exhausters and other large machinery objects where from a business interruption point of view, it is critical that equipment is not exposed one by the other in case of fire or explosion loss. Spare parts for key-machine objects are important. Critical machinery, such as revolving drum mixers, crushers, gear sets and electric motors

Steel Sector: Risk & Future Insurance Potential

should have necessary spare parts to prevent or lower business interruption in case of damage. Preventive maintenance of utilities and production equipment is one crucial management task. Fire and explosion protection concerns for the ore processing are related to the combustion control systems involved with the mainly gas fire sintering machines.

PML and MFL estimates

Property damage (PD) for the coke by-products plant depends on the plant layout. A very congested plant could have a PML of 100%, whereas a site with good spacing could have PD PMLs ranging from 10 to 25%. The business interruption (BI) estimate depends on what must be repaired or replaced, and can range from three to four months. The PD PML for coke ovens would be approximately 10% of the value of one oven battery. From the PML BI prospective a three-month downtime for the compartments affected should be considered. The MFL for coke by-product plants can be 100% PD and five-month BI. The PD MFL for a coke oven would be about 25% of the value for one oven battery. Iron reduction Loss exposures from blast furnaces include molten metal breakout, cooling water supply loss and leaks, turbo-blower breakdown and combustion explosions. About 60% of all molten material losses are caused by failure of the refractory in the furnaces. Breakthroughs can happen at any time of the life of the refractory, however, most failures occur soon after installation due to poor workmanship or defective materials. Breakouts are not prevalent during the middle of the refractory useful life but they increase again near the end of the projected life-span

The success of any blast furnace lining depends strongly on the design of the cooling water system. Pumps with individual capacities of 200,000 l/min or more are installed to maintain effective cooling over an extended furnace campaign. Therefore, it is the highest priority to have a reliable and redundant cooling water system and power supply to electric motors driving the cooling water pumps. Although long refractory life is usually the result of using a superior quality refractory, a major part of the improvement in life undoubtedly results from more effective cooling, such as multiple stack-cooling plates. With the integrated charging, lining and cooling systems concept, it has been proven that a campaign of ten years is achievable without interim relines or grouting programmes. The other major refractor life-span parameters are the consistent process conditions resulting from ideal furnace burdening, charging and operation. This can be achieved through

Steel Sector: Risk & Future Insurance Potential

computer controlled process flow and supervision. Failure of this control equipment bears one other hazard associated with the operation of blast furnaces. Turbo blowers represent a high loss potential covered under machine damage exposure. The drivers for the turbo blowers can either be steam turbines or electrical motors, but damages to steam turbines cause higher PD losses and BI times.

PML and MFL estimates

The PD PML for a blast furnace might be estimated at 20% of the complete installation value with 15 weeks downtime. One PD MFL estimate of 50% of the unit value with ninemonth BI can be assumed. The PD PML for a 3,000 HP direct current motor driving a blast furnace turbo blower, from the boiler and machinery perspective, can be estimated at 50% damage of the unit (unit value estimate USD 460,000*), with 20 days PML BI. Compared to an industrial 2,500 kW steam turbine as the driver for the turbo blower, estimated would be in the region of a 30% damage of the unit (unit value estimate USD 1.7 million*). The MFL scenarios give a PD of 115% unit value with 6-month downtime for the electric motor. The steam turbine equivalent can be estimated with similar values.

Iron refining Fire, explosion, machinery and other hazards

Loss scenarios for steel making furnaces include molten metal spills, steam explosions and hydraulic fluid fires. Damage to the large gear sets of furnace tilt mechanisms and transformer breakdown associated with the operation of electrical furnaces is possible. The failure rate of arc furnace transformers is triple the rate of ordinary liquid filled power transformers greater than 10,000 KVA. Estimated time between transformer failures is seven to eight years. Failures include furnace switching before removing the electrodes to break the arc and high voltage bushing flash over which can be caused by dust build-up. One important issue is the prevention of radioactive contaminated scrap entering the steel making furnaces. Radioactive scrap can contaminate the production equipment and make finished steel useless for customers. To prevent this, scrap should be scanned with Geiger counters before it enters the steel making furnaces.

PML and MFL estimates PD PML for an electric furnace can be estimated at approximately 25% of the unit value with a BI exposure of six months. Another assumption could be the loss of a large power

Steel Sector: Risk & Future Insurance Potential

transformer. These units are commonly worth more than USD 5,000,000 and can take two to three years to replace. BOFs PML depends on size and design. Many BOF shops have two or more BOF vessels that share auxiliary production equipment. PD PML would be in the region of 20% whilst the BI exposure would be about three months on the vessel where the loss occurred and one month on any vessel that shares equipment with the affected unit. PD MFL for an electric furnace can be 100% with a BI MFL exposure of up to nine months. For BOF the PD MFL would be approximately 50% whilst the BI exposure would be about six months on the vessel where the loss occurred, and three months on any vessel that shares equipment with the affected unit.

Fabrication Fire, explosion, machinery and other hazards

Continuos casting may present large loss potentials from molten metal breakout. Loss of important computerised control equipment on automated lines can become very costly. Rolling mills normally represent the largest steel fabrication loss exposure. Losses are more frequent with cold mills, due to the use of combustible coolant components, however, losses also occur on hot mills. The main fire hazard is associated with the hydraulic oil systems supplying and supporting the mill stands as well as the possible residue built up from applied rolling fluids (95% water, 5% animal fat or special oils) when water is evaporated. Hydraulic fluid line break near a mill stand can be ignited on hot metal surfaces and ignite residues from rolling fluid in the exhaust systems. Excellent housekeeping is essential especially in the hydraulic fluid basements near the mill. The ready availability of spare drive motors for all key motors associated with rolling mills stands is important to reduce the downtime of the mill in the event of a motor failure or winding fire. If it is not practical to maintain complete spare motors on site, plant personnel should at least maintain spare parts for key components of the individual important motors. This will reduce rewind or repair times in emergency situations.

PML and MFL estimates

PD PML assumptions for continuous casters would be approximately 10% of the entire unit value with a BI exposure of three months. It is not uncommon for continuous casters to process 100% of the steel at one facility. The MFL scenario can be estimated at 20% of the unit value with six months BI exposure.

Steel Sector: Risk & Future Insurance Potential

The PD PML for a rolling mill is difficult to determine as a percentage of the replacement cost for the entire mill. For one thing, most of todays modern mills were built in the 1970s, and information on both their actual value and their replacement costs are very difficult to obtain. Also, the total replacement cost must include the associated motors, gears and control rooms and the cost of mechanical, electrical and structural installations. Furthermore, various control systems and mechanical options on a mill can greatly increase its value without substantially changing its size or appearance. BI PML for rolling mills should be about four months for a hot mill and five months for a cold mill. However, this could be higher, depending on the degree of automation and computer control. The PD MFL for rolling mills would be 100% of the mill value, control room and the buildings in which they are contained. Replacement costs for rolling mills vary widely and must be carefully determined. Replacement values of USD 700 million are not uncommon. BI MFL for rolling mills should be about eight months for a hot mill and nine months for a cold mill.

INSURANCE ASPECT Health Insurance Aspect

1. Health Effects of steel industry on health

Steel products in the natural state do not present an inhalation, ingestion, or contact health hazard. However, operations such as welding, burning, sawing, brazing, grinding, and possibly machining, which results in elevating the temperature of the product to or above its melting point or results in the generation of airborne particulates may present hazards. The above operations should be performed in well ventilated areas. The major exposure route is inhalation.

Acute: Excess inhalation of all metallic fumes and dusts may result in irritation of eyes, nose, and throat. Also high concentrations of fumes and dusts of iron-oxide, manganese, copper, and selenium may result in metal fume fever. Typical symptoms consist of a metallic taste in the mouth, dryness and irritation of the throat, chills and fever, and usually last from, 12 to 48 hours.

Steel Sector: Risk & Future Insurance Potential

Chronic: Chronic and prolonged inhalation of high concentrations of fumes or dust of the following elements may lead to the conditions listed opposite the element: 1. Iron (iron-oxide)-pulmonary effects, siderosis. 2. Manganese-bronchitis, pneumonitis, lack of coordination. 3. Chromium-various forms of dermatitis, inflammation and/or ulceration of upper respiratory tract, and possibly cancer of nasal passages and lungs. Based on available information, there does not appear to be any evidence that exposure to welding fumes induces human cancer. 4. Nickel-Ni fumes and dusts are respiratory irritants and may cause a severe pneumonitis. Skin contact with nickel and its compounds may cause an allergic dermatitis. 5. Selenium-nasal and bronchial irritation, gastro-intestinal disturbances, garlic odor of breath. 6. Copper-pulmonary effects 7. Vanadium-no reported cases of exposure to vanadium 8. Cobalt-inhalation of cobalt dust may cause an asthma-like disease with cough and dyspnea. 9. Molybdenum-pain in joints, hands and feet.

Medical Conditions aggravated by Exposure: Chronic diseases or disorders of the respiratory system.

2. Erection all risks insurance The first thing is to determine whether the process is a conventional one or whether it is still a form of prototype. The erection of steel plants usually involves large-scale construction sites with high sums insured. As with all long-term projects, a construction time schedule should be obtained for the purpose of risk assessment. It often happens that cover is requested for revamping and modernization work. Risk-commensurate premiums can only be calculated when the scope of cover is described in detail. On account of the sheer physical weight of steel plants, attention must be paid to the quality of the subsoil and the type of foundations used. A subsoil report should be obtained. Steel Sector: Risk & Future Insurance Potential

Steel plants require large amounts of cooling water and are therefore usually located near rivers or the sea. Attention must be paid to the danger of flooding. The windstorm risk is also high on account of the many lifting operations using heavy cranes.

3 Machinery insurance

Here too the first step is to find out whether the process is a conventional one or a prototype. Steel plants comprise a very large number of individual machines, so that cataloguing them in detail is hardly practicable. A more general list of plants is more suitable. The deductible should not be too low in this case. Refractory linings have a very limited service life and must be replaced regularly. An agreement must be made with regard to an adequate amount of depreciation being accounted for in the event of a claim. The usual maintenance and depreciation endorsements for electric motors, transformers, turbines, and generators are to be applied. Risk inspections are recommended.

4. Machinery loss of profits insurance Owing to the type of processes involved, spare machines are often on stand-by and there is usually a generous stock of spare parts on hand for the same reason. It is common to have a relatively large maintenance department. In the event of a breakdown in operations, it is often possible to purchase semi-finished products from other manufacturers. These factors are important in rating the risk.

Steel Sector: Risk & Future Insurance Potential