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55 NO.7
SPECIAL FEATURE
r
.'0.
Introduction:
The eight infrastructure industries known as "CORE SECTOR" having a weight of 37.90 per cent in the liP registered a growth of 5.3 per cent during April-August, 2011 over 6.1 per cent during the same period of the
preced ing year. Auto Industry: Growth Slows Down Production, domestic sales and exports by the Indian Automobile industry during April-August, 2011 are shown in Table-A (next page).
India's liP (Index of Industrial Production) grew by a meager 1.9 per cent in September, 2011 over 6.1 per cent in the same month of 2010. The liP growth during April-September (HI of 2011-12) rose by 5.0 per cent over 8.2 per cent in the same period of 2010-11. The manufacturing sector, having a weight of 75.5 per cent in the liP grew 5.4 per cent over8.8 per cent in HI of 201112 vis-a-vis H1 of 201 {}-11. Dr. Rangarajan, Head of Prime Minister's Economic Advisory Council said, "The liP numbers (for September) are disappointing it is well below our expectation. But I do see a pick-up by the end of March. We had originally expected overall liP at 7 per Gentfor the fiscal, but now it could be 6 per cent." He asked the RBI to rethink the conventional policy of interest rates.
14
The decline became more severe in September and October, 2011. Car sales fell 23.8 per cent in October, 2011 on a y-o-y basis. Two wheelers sales recorded a marginal growth of 2 per cent. Three Wheelers posted a negative 2.06 per cent growth and overall domestic sales at 1.44 million units recorded a negative 1.05 per cent growth in October, 2011 on a y-o-y basis. The DirectorDECEMBER 2011
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VOL.55 NO.7
SPECIAL FEATURE
--- ---L~.
Typeof Vehicles
Passenger ehicles V
The
Exports % Change
NM P gives
Table A: Performance of Automobile Industry: April-August, 2011 Production % Change Domestic Sales % Change
specialattention to focus sectors that it identifies as employmentgenerating ones, capital goods, strategic industries and sectors where India enjoys comfortable advantages such as automotive and pharma. The Indian industry has welcomed the National Manufacturing Policy. But someexperts are skeptical becauseof the land requirementand
1,249,464
8.5 (31.20)
977,201
1.94 (32.91)
220,256
22.40 (1.48)
Commercial Vehicles
355,430
25.05 (46.81)
301,267
17.80 (45.59)
34,011
30.04 (84.01)
Three Wheelers
361,727
18.37 (36.86)
199,721
(-)0.27 (19.87)
166,821
50.11 (99.99)
Two Wheelers
6,232,284 (29.85)
5,357,851
15.94 (25.86)
850,273
30.44 (52.33)
Total
8,198,905
6,836,040
13.26 (27.32)
1,271,361
30.23 (43.61)
Souf[e:5/AM. Unff
N.B.:
NumberofVehides
1) % Chongeis the chong' over the corresponding period of previous yeo, 1) Rgures in bll1Cketsshow growth in HI of10111-11 over HI of 1009-10.
General, SIAM said, "The auto industry is facing the double whammy of high interest rates and rising fuel prices." Market leader Maruti Suzuki lost a production of 75,000 units due to strike at its Manesar and Gurgaon plants. NationalManufacturingPolicy The Union Cabinet has approved the National Manufacturing Policy (NMP), which among other things aimsto: a) Enhancethe share of manufacturing in the country's GDPto 25 per cent by 2022 from the current level of 15-16 per cent. b) Create 100 million jobs in the manufacturing sector. c) Establish minimum 5000 hectare of land for the National Manufacturing Investment Zones (NMIZs).
experience with the SEZs. A member of the Planning Commission has observed that "As far as the subject of land acquisition for the NMIZs is concerned, it will not be easy in our country." However, if the policy is implemented success fully and all its objectives arefulfilled, the Indian steel industry will benefit to a large extent in the future years. Capacityof the Indian Steel Industry The projected capacity of the Indian steel industry by 2012-13 is likely to reach 122.95. The capacity in 200910, the Brownfield and Greenfieldexpansionsup to 201213 are shown Table - 1.
Producers
d) Enhance the skill of rural youth. The policy envisagesto setup five integratedtownships in the NMIZs enjoyingstate-of-the-art infrastructure, lesser regulatoryand compliance of environmental issues,faster clearances and some fiscal incentives. These zones will be setupthrough Special PurposeVehicles(SPVs)including the central and state governments as well as other stakeholders. The land to be acquiredwill preferablybe wasteinfertile land which is not suitable for cultivation; not in the vicinity of any-ecologicallyfragile area and with reasonableaccess to basic resources:
15
Capadty
Expansion Planned
Total Capadty
2009-10 Private Sector Tata Steel Essar Steel JSW Steel JSPL Ispatndustries I
Bhushan Power
& Steel
Bhushan Steel
Others& SecondarY
1.20 0.80
31.00 12.84 2.90 72.74
1.60 2.20
3.20 10.66 3.40 37.96
12.25
2.80 3.00
34.20 23.50 6.30 122.95
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VOL 55 NO.7
with a growth of 11.3 per cent in the above comparative periods. The public sector producers, SAIL and RINL (VSP) posted marginal increase in production of crude steel in 2010-11 over the preceding year while Ispat Industries and Essar Steel Ltd. recorded negative growths. Productionfor Ille of Clrbon FinishedSteel
Assocham Summit in October, 2011 that by 2011-12, India's steel capacity might reach 90 Mt and is likelyto cross 110 Mt by the end of 2012-13. He also said that the growth of India's steel demand averaged 10 per cent per year over the last seven years and there was a likelihoodthat the trend would continue for at least the next decade. He also hoped that the demand may exceed ten per cent at times during the next 10 to 15 years. He opined that the countrywould be able to meet the steel demand through domestic production at least for the next five years. India's present demand has been estimated at about 66 Mt. Performlnce theIndlln St..llndultry: 2010.11 of
Production of Crude Steel India's production of Crude Steel in 2010-11 vis-a-
...
)
,t .
from gross production. Categorywiseproductions for sale of carbon finished steel in India in 2010-11 vis-a-vis 2009-10 are shown in Table - 3.
Table 3 : Categorywise Production for sale of Carbon Finished Steel in India:
~
-,,1.""
...
The Joint Plant Committee(JPC)is presentlymonitoring "Production For Sale" which is arrived at after deduction Inter-PlantTransfersOPT)and producersown consumption
9.2
5.7
-"""""''''''''''ri--
('000 tonnes)
Category Bars Rods & Structurals Rly. aterials M TotalLongProducts Plates
HRCoils Skelp /
It is observed from the above table that the overall production of crude steel in India has increased by 5.7 per cent in 2010-11 over 2009-10. According to the World Steel Association (WSA), India was the fifth highest producer of crude steel in the world in the calendar year 2010 at 66.8 Mt, marginally lower than Russia'soutput of 67.0 Mt at the fourth place during the same period. During 2010-11, Tata Steel was the highest domestic producer as an individual steel plant with an output of 6.86 Mt. JSPL recorded the highest growth of 15.9 per cent in crudesteel productionin 2010-11 overthe previous year, followed by Jindal South West Steel Ltd (JSWSl)
18 "IRON & STEEL REVIEW"
Production ForSale 2009-10 2010-11 (P) 24,368 5,S37 1,094 30,999 4250 21,770 4,141 1,041 26,952 3973
HR Sheets
CRSheets/Coils
12,362 570
5762 5,596 176 233 1,851 0 30,800
12,002 603
5914 5,620 146 239 1,636 7 30,140
3.00 (-)5.47
(-)2.57 (-10.43 20.55 (-)2.51 13.14 2.19
GP/GC Sheets
61 799
57 092
8.24
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VOL 55 NO.7
SPECIAL FEATURE
It is evident from the table 3 that the share of long products in the total production for sale of carbon finished steel in 2010-11 has gone up to 50.16 per cent from 47.21 per cent in the previous year. The overall growth in production for sale of carbon finished steel in 201011 was 8.24 per cent over 2009-10. The growth of the long product segment wasa healthy 15.02 per cent due to the rise in demand from the construction sector.Constructionsector recordeda growth of 8.1 per cent in 2010-11 over 7.0 per cent in the previousyear.The low growth of 2.19 per cent of the flat products group was mainly due to a decline in the growth of the Manufacturing Sector at 8.3 per cent in 2010-11 as against 8.8 Imports Imports of Carbonfinished steel by India in 2010-11 vis-a-vis 2009-10 are shown in Table - 4.
I
Table 4: Imports of CarbonFmlslieil5teel;in2Q10"llvis-a-vls2oo9"10
by 1.27 percent in 2010-11 overthe previousyear.Export of long products has declined by a hefty 33.71 per cent in 2010-11 over 2009-10 due to a robust domestic demand as well as lack of adequate demand and low process in the global market. The export of flat product rose marginally by 1.81 per cent due to a low growth in domestic production as also due to a low demand in the world market. ApparentConsumption CarbonFinished of Steel in India: 2010-11 Categorywise apparentconsumptionof CarbonFinished Steel in India during 2010-11 and 2009-10 are presented in Table 6.
year.
('000 tonnes)
Cateaorv
ADDarent ConsumDtion
% Chanae 13.06 33.87 11.16 16.25 {-J0.25 (-)1.92 3.15 4.62 4.99 15.09 (-)4.46 31.85 36.59 2.11 31.81 10.79
I ('000 tonnes)
Imports During 2009-10 2010-11(P) 529 5434 5963 693 5648 6341
HR Sheets
CR Sheets/Coils
GP/GC Sheets
It is observed from the above table that the overall imports of carbon finished steel by India in 2010-11 at 5.96 Mt over 6.34 Mt in 2009-10 has declined by about 6.0 per cent. The hefty decline in the import of long products Exports Exports of carbon finished steel by India in 2010-11 vis-a-vis 2009-10 are shown in Table - 5
Tatile 5: EJ!ports of Carlion Fmlsheil5teelm.20JO-11 vis-a-VIs 200.9"JO
Elee. Sheets TinplateIncl. /W) ( W TMBP PipeslargeDia) ( TinFree Steel Total Flat Products less DoubleCountinq
GrandTotalFin. Steel
OatoSoun:e:JPC. {P}= Provisionol
2010-11(P) 24439 5621 1096 31156 4762 13970 622 6637 4738 488 343 1 1536 56 33153 2172 62137
2009-10 21616 4199 986 26801 4774 14244 603 6344 4513 424 359 1 1165 41 32468 3185 56084
may be attributed
to higher domestic
production.
It appearsfrom the abovetable that the overallgrowth in apparent consumption of carbon finished steel in India in 2010-11 has beena healthy 10.79 per cent which was one of the highest in the world.
I
Double counting occurs only in case of flat products. After deducting the same from apparent consumption, the real consumption of flat products in 2010-11 works out to 3.98 Mt less than 31.16 Mt for long products. While all the long products have recorded double - digit growths in 2010-11 over 2009-10, Pipes (Large-Dia)has achieved the highest growth in flat product segment at 31.85 per cent. CR Sheets/Coils and GP/GC Sheets recorded growths over 4 per cent.
DECEMBER 2011
('000 tonnes)
Product longProducts FlatProducts Total
OatIl Soun:e:JPC.(P) = Provisionol
It is evident from the above table that the overall exportsof carbonfinished steelby Indiadeclined marginally
20
VOL
55 NO.7
SPECIAL FEATURE
Performance the Indian Steel Industryduring of H1 of 2011-12 The performance of the Indian steel industry during April - September of 2011 (HI of 2011-12) is presented below: Productionof CrudeSteel
2JU.1-1.t~~vis H1,gf20111U
Category Bars &Rods Structurals Rly. aterials M Total LongProducts Plates
HRCoils/Skelp
I
('000 tonnes) %Change 6.58 9.01 3.69 6.91 9.70 12.02 (-)9.85 7.54 9.84 (-)3.45 14.16 16.93 10.29
HR Sheets
CR Sheets/Coils
GP/GC Sheets
Production for sale H1 012010-11 H10f2011-12 12656 11875 2940 2697 534 515 16130 15087 2161 1970 6644 5931 247 274 2939 2733 2980 2713 84 87 129 113 1043 892 16227 14713
32357
29800
8.58
Fin.Steel
Data Sourre: IPC. "" above figulPSall' provisional
Production of Crude steel in India during April September of 2011 vis-a-vis the same period of the previous year is shown in Table - 7.
Table 7: Production of Crude Steel in India in H1 oh011- 12 vis-a-vis Iii' of 2010-11: Producer wisL-
comparativeperiods.The highestgrowthamongthe finished steel products was that of HR Coils/Skelp at 12.02 per cent. Imports Imports of carbon finished steel by India during HI of 2011-12 vis-a-vis HI of 2010-11 are shown in Table - 9.
('000 tonnes) Producer SAil RINl(VSP) Tata Steel SecondaryMaiors JSWSl Production of CrudeSteel
H1 012011-12 (P) H1 012010-11 (P)
% Change (-)0.2 {-I 5.1 5.5 0.6 (-)8.0 36.4 15.8 1.9 3.1
I
--Product
- --
--
('000 tonnes) Imports During H10f2011-12 H10f 2010-11 203 386 2056 3595 2259 3981 % Change
JSW ISPAT
Essar Steel JSPl OtherProducers (EST) Total
DataSourre:IPC. (PI _al =
H 47.41
(-)42.81 (-)43.26
N.B.AIIlheabaw/iglm"'''''''''''''
The overall growth in Indian crude steel production in HI of 2011-12 was a low of 3.1 per cent. Tata steel was the highest domestic producer of crude steel as an individual plant producing 3.54 Mt in HI of 2011-12. Categorywise Production for sale of Carbon finished steel during HI of 2011-12 vis-a-vis HI of 2010-11 are shown in Table - 8. The overall growth in the Production For Sale of carbon finished steel in HI of 2011-12 has been 8.58 per cent over the same period of the previous year. The growth in the production for sale of long products was 6.91 per cent and that of flat products was 10.29 per cent in the above
22
Hefty declines are seen in the total import of carbon finished steel both in long and flat product segments in HI of 2011-12 overthe same period of the previousyear. Exports Exports of carbon finished steel in HI of 2011-12 vis-a-vis HI of 2010-11 are shown in Table - 10.
Table 10: Exports of Carbon Finished Steel in H1 of 2011-12 vis-a-vis H1 012010-11
('000 tonnes)
Product
longProducts FlatProducts Total
99 1207 1306
Oat.SamrIK.N.B.AIIlheabaw/iguRs",,..,...,,,,.
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2011
VOL. 55 NO.7
SPECIAL FEATURE
Overall exports of carbon finished steel has increased by 53.60 per cent in HI of 2011-12 over HI of 201011 and that of flat products by a hefty 57.00 per cent in the above comparative periods. ApparentConsumption Apparent Consumption of carbon fi nished steel in HI of 2011-12 vis-a-vis HI of 2010-11 are presented in Table - 11.
Table 11: Apparent consumptionof carbonfi'iiiS'iied steel in Indiaiiuring Hl1
I
Product Long Products FlatProducts Total
Less DoubleCountinQ RealConsumption
Data SOU"" JPC N.B. All theabove
SAIL is planning to setup a 3-5 Mtpy capacity steel plant in South Africa. It is learnt that the South African government has proposed a joint venture plant with SAIL and has promised iron ore and coking coal mines for it.
figu~s Q~ "..isional
Double counting occurs only in case of flat products. Deductingdouble counting from the apparentconsumption of flat products as shown above, the real consumption of flat products works out to 15331 thousand tonnes in HI of 2011-12 'and 16099 thousand tonnes in HI of 201011 with a percentage change of minus 4.77. The decline in consumption of flat products may be attributed to a low growth of the manufacturing sector at 5.4 per cent in HI of 2011-12 as compared to 8.8 per cent in HI of 2010-11 and also a decline in market demand. Overseas Ventures Indian steel producers are earnestly trying to build steel plants and acquire overseasiron ore and coking coal mines to ensure raw material security. Some of the major developments in this regard are mentioned be low: SAIL
~
SAIL will build a steel plant in Oman which is a gasrich country and would get gas from Oman at a cheap rate.
.:t SAI L may also build steel plants in Mongolia and Indonesia in return for iron ore and coal mining leases.
'"
SAIL has decided to rope in strategic partners like NMDC,VizagSteel Plant,JSPLetc. to bid for acquisition and development of HAJIGAK iron ore mines in Afghanistan. These mines have an estimated reserve of 1.8 billion tonnes of high quality magnetite ore. The Afghan government has shortlisted 22 companies including SAil. SAIL's proposal to setup a 3 Mtpy capacitysteel plant in Afghanistanmay be an additional advantagefor the Indian Company.The HAJIGAKiron ore mines are located 130 km west of Kabul.
Tata Steel SAIL has planned to makeagreementswith the coking coal miners in Australia and South Africa. The value of the two mines in South Africa and one in Australia is likely to be about US$ 1.5 billion and would be used to reduce SAIL's import bill. SAIL presently imports about 9.5 Mt of coking coal annually which may go up in future. SAIL's negotiations are done through ICVL in which the company has a share of 26 per cent.
24 -IRON
Tata Steel has signed a binding agreement with the Canadian iron ore miner. New Millennium Capital Corporation (NMCC) to develop the taconite iron ore deposits in Canada.The taconite project, cited as the world's largest under-developed project, includes the LabMagand the Ke Mag iron ore deposits in Labrador, eastern Canada.Tata Steel will own 80 per cent stake in the joint venture.
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SPECIAL FEATURE
Tata steel has iron ore assets in Ivory Coast which could yield 20 Mtpyof iron ore. The company signed a deal with the Ivorian state mining firm to develop iron ore mines at Mount Nimba and the assessment of the area would be completed by end 2011. Tata Steel is setting up a joint venture integrated steel
plant with Vietnam Steel Corporation (VNSTEEU, Vietnam's largest steel company. Tata steel will have a share of 65 per cent in equity in the steel plant and 30 per cent stake in the mines. The plant is likely to be operational by 2013. The project which was put in black burner over resettlement issues, is now being cleared for a kick start.
.
.
JSWSLhas acquireda cokingcoal mine inWestVirginia in the U.S. It has a total resource of 123 Mt while reserve in the area, where drilling has already been done, are estimated at 45 Mt.
JSWSL will invest about US$500 million for buying coal mines in South Africa and Australia to secure supplies for its local expansions. . JSWSL has picked up a 5 per cent share in JFE of Japan while JFE has purchased 14.99 per cent equity in JSWSL.The two companies together will make auto grade steel in India using JFE's technology and buy iron ore mines.
East Africa Holdings Ltd., (EAHU, a privately held companyofthe EssarGroup,willformtwojointventures companies with Zimbabwe Government. One of this will be for revivingZimbabweIron& Steel Co. (ZISCO) and the other for developing iron ore mines. Essar will own 60 per cent stake in the steel venture and 80 per cent in the mineral venture. EAHLwill invest about US$ 750 millionto reviveZISCO.Accordingto sources, ZISCOhas a probable reserve of iron ore of about 2030 billiontonnes.
JSPL has secured 3800 acres of land in EL Mutan in Boliviaout of its total requirement of 5000 acres. The company will setup a pellet plant, a sponge iron plant and an integrated steel plant in Bolivia. JSPL has acquired the shadeed Iron and Steel Plant
in Oman and has started setting up a sponge iron plant there. The company has also planned to setup an integrated steel plant in Oman.
Co., have decided to work jointly on bids to develop and operate underground coal mining projects in India, Mongolia, Australia and the U.S.
Essar Steel Holdings,a part of Essar Groupwhich has acquired the U.S. based Minnesota steel, is planning to setup a plant of 2.5 Mt capacity at a cost of about US$ 1.6 billion. Synergies of the plant will be provided by the captive supply of 1.4 billion tonnes iron ore, already procured by Essar Steel Holdings. Essar Groupwill increase the capacity of its proposed Pellet Plant in the U.S.A. due to come up by 2012, from 4 Mtpyto 7 Mtpy.This will help to provide raw materials for Essar's steel plant at Algoma in Canada and will also enable Essar to sell about 1 Mtpyof pellets in the open market. Essar Group has bought a coal mine in Indonesia for its thermal power projects at a cost of Rs. 900 crore. The mines located at the Kutai region of East Kalimantan, has a reserve of 100 Mt of thermal coal and a mineable reserve of 64 Mt.
26' IRON & STEEL
Monnet Ispat Energytd. & L Monnet has acquired a coal mine in Indonesia from
PT Sarwa Sembada Karya Bumi at a cost of about US$
24 million to use the high-grade coal for its proposed thermal power projects in India. NMDC
NMDC has signed a MoU with Legacy Iron Ore Ltd. of
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DECEMBER
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VOL
55 NO.7
SPECIAL FEATURE
mining company. By this investment, NMDC would expand its geological footprint and position itself for acquisition of additional mineral assets in iron ore and coal in Australia. Other Important Developments
SAIL will setup a 3 Mtpy capacity steel plant in a Joint Venture with p~SCO of Korea near its existing plant at Bokaro. The plant will use 'FINEX' technology of p~sco which usesnon-coking coal and iron ore fines for steelmaking. JSWSL has placed an order with SMS Siemag of Germanyfor supplying pickling-cum-tandem cold mill at Vijaynagar. It will have a capacity of 2.3 Mtpy of cold strips in widths up to 1890 mm and will be operational in 2013. The five stand six high mill will havecombined continuously VariableCrown/Enhanced shifting system technology. NMDC and severstal of Russia will jointly invest Rs. 9,000 crore to setup a 50:50 JV for building a 5 Mtpy capacity steel plant in Bellary in Karnataka.The plant will have an initial capacity of 2 Mtpy expandable to 5 Mtpy. It would start in 2012 and is to be completed within 36 months. The JV would have its coking coal mining subsidiary in Russia and iron ore mining subsidiary in India to ensure long-term supply of raw materials. ArcelorMittal India has started drilling operations at the Seregarha coal block in Latehardistrict of Jharkhand signaling that work towards setting up of the proposed 3 Mtpy capacity steel plant may have already started.
EssarSteel hassigned a MoUwith KobeSteel of Japan to produce auto grade steel. The collaboration will be in the areas of technology for manufacturing high strength steel (AHSS) used in automotive and other relevant areas.
Tata Steel has signed a Joint Venture with Nippon Steelof Japanfor setting up a Rs.2,300 crorespeciality steelmakingline at Jamshedpurto cater to the domestic auto industry. The JV would setup India's first continuous annealing and processing line to produce 600,000 tonnes of automotive cold-rolled steel annually. Tata Steel will hold 51 per cent stake in the JV. The plant is expected to be operational 2013. in
The second strand of CSP plant supplied by SMS Siemag, Germany to Essar Steel at Hazira was successfullymade operationalon 15th July, 2011, the first strand having been started up on 31st March, 2011. The third strand will operate from 2012. Essar Steel with thus have the first 3 strand CSP plant worldwide with an annual capacity of 3.5 Mtpyof Hot Strips and a product range that covers carbon steel as well as pipe grades, silicon and duel phase steels.
The company has already applied for permission from the Jharkhandgovernmentto commencedrilling operations at the Karampada iron ore mines in the West Singhbhum district. The drilling operations or the geophysical prospectingwould help the companyassessthe availability of coal and iron ore at these two mines for which ArcelorMittal licenses. has already obtained prospecting ~
TenovaHYLand Danieli & C SPAas a consortium have made an agreementwith JSPL to supply EnergironZR DR technology for the DRI plants to be installed in Angul and Raipur. The project consists of installation of four DRI plants using reformerless Energiron ZR processof 2.75 Mtpy capacities each. JSPL plans to build DRI plants at various locations with a combined production capacity exceeding 10-Mtpy of highly metalized DRI for supplying to its steel plants.
28
Essar Steel has granulated three iron tappings at its 10 Mtpy plant at Hazirausing UHT'sGranshotmethod. The plant has a capacity to granulate 140 tonnes of pig iron in less than an hour. The Granshot method is an important buffering possibility between the blast furnace and two Corex2000 units and the downstream refining and casting processesin the new steelmaking plant.
The producedGranulatedPig Iron (GPI) is mainly used in the Conarc's EAF to deoxidize the hot heel steel. Surplus GPI is used as an alternative iron source to
:, ...
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VOL 55 NO.7
SPECIAL FEATURE
Jindal Steel & Power Ltd. (JSPU has signed a MoU with Rio Tinto to introduce HI smelt technology for the first time in the world, other than a pilot plant commissioned by the latter in Australia - the Kwinana HI smelt plant in which Rio Tinto has a 60 percent share. As per the MoU, Rio Tinto's Kwinana plant from Australia will be relocated to JSPL's steel plant at Angul in Odisha.
All major steel producers who have involvement in foreign exchange transactions have lost considerable portion of the net profits due to the weakening of the rupee in Q2 of 2011-12. IronOreCrisisin Karnataka The order of the India's Supreme Court to suspend all iron ore mining activities in Karnataka, excepting those of NMDC, on environment grounds, has created a crisis for the iron ore industry in the region. NMDC will assure a supply of one million tonne of iron ore on a monthly basis. But how much it will suffice to meet the requirement of Karnataka and its neighbouring states that annually consume about 40 Mt of iron ore is a big question. The worst sufferer in this regard is JSW Steel Ltd. which has stepped up its production capacity to 11 Mtpy. According to a media report, the company has cut back its productionby 30 percent a Vijaynagar. he management T of the company has, therefore, lowered it production and sales targets by 13 per cent and 14 per cent respectively for the year 2011-12. The crisis has also affected smaller units in the region adversely.
Conclusion
s.
11
HI smelt technology smelts iron ore fines directly usi ng non-coki ng coals, and offers sign ificant economic and environmental benefits to the steel industry.
c
I
SAIL has issueda global tender for building a 10 Mtpy capacity beneficiation plant and a 4 Mtpy capacity Pellet plant at Gua Iron Ore Mines to improve the quality of the ore and make operations of the mines more sustainable. The first phase of Tata Steel's 6 Mtpy steel plant at Kalinganagaris expected to be commissioned by early
Weakening RupeePullsDownNet Profit of In the second quarter of 2011-12, the rupee fell by about 10 per cent against U.S. dollar adverselyaffecting the net profit of many companies including those in the iron and steel sector.
India's GDP is likely to grow by 7.5 per cent in 201112 as against 8.5 percent in the previous year. The manufacturing sector which grew by 5.00 per cent in HI of 2011-12 may record a growth of 7 per cent in the FY'12 fiscal as compared to 8.3 per cent' in 2010-11. India's inflation touched a high of 9.73 per cent in October, 2011. Coreinflation or the inflation non-foodmanufactured products rose to 7.6 per cent in October, 2011 from 7.1 per cent in the previous month. Production for sale of carbon finished steel rose by 8.58 per cent in HI of 2011-12 as against 3.89 per cent in the corresponding period of the previous year. But the consumption of carbon finished steel nose-divedto 1.52 per cent over 9.70 per cent in the above comparative periods. This has happened due to high interest rates, high inflation, low growth of infrastructure sector and lack of market demand. The Indian steel industry is heading towards a slowdown in 2011-12 as compared to the preceding. year.
DECEMBER 2011
SAIL's coking coal imports became costlier due to week rupee. The impact of appreciation of the dollar against rupee during the first half (HI) of 2011-12 on SAIL's net profit was Rs. 579 crore. Usha Martin Industries had to face a foreign exchange loss of Rs. 120 crore in Q2 of 2011-12, due to restatement of outstanding foreign currency loans and acceptances.
Iron ore miner Sesa Goa reported a profit of Rs. 1.28 crore in Q2 of 2011-12 against a profit of Rs. 384.94 crore in the same period of the previous year. The company had to bear a foreign exchange loss of Rs. 234.09 crore during Q2 of 2011-12 on its foreign currency loans and convertible bonds.
30
REVIEW.