India Steel Industry Report - 2015

India Steel Industry Report - 2015

This report profiles India’s steel industry, discussing market data and trends into 2015 and beyond. The report also highlights key leading players in the sector including Steel Authority of India Ltd (SAIL), JSW Steel Ltd (JSW) and Tata Steel Ltd.

India’s steel industry faced a tough time in the fiscal year ended March 2015. The slowdown in Chinese steel demand caused a global oversupply situation, which led to a decline in the global steel prices. The differential in domestic and global prices triggered an increase in imports; negatively affecting domestic producers and dragging down domestic prices.

Lower profitability, excess supply, rising inventories, increased finance costs, losses on foreign exchange and a ban on iron ore mining were among some of the other issues that hurt domestic steel producers in FY15. India’s steel consumption was subdued even in the first half of FY16.

Rising imports, difficulty in resource mobilization and global slowdown in steel demand have emerged as the major threats for this sector. However, the outlook for Indian steel industry is stable in the medium-term owing to a low per capita steel consumption and a largely untapped rural market.

Key Points:

India’s steel industry saw a period of steady growth during the last decade, backed by development in sectors like construction, real-estate and automobile. Total finished steel production grew at a CAGR of 9% during 2004-14.

Steel Authority of India Limited (SAIL), Tata Steel, Jindal South West Steel (JSW), Rashtriya Ispat Nigam Limited (RINL), Essar Steel, and Jindal Steel & Power Limited (JSPL) are the six leading players in the Indian steel sector. Together, these six players accounted for around 52% of the country’s crude steel production in FY15.

Domestic steel production saw stable growth in FY14, with the production index growing by 7.7%. However, the index recorded subdued growth of 2.6% y/y in FY15. Slug of cheap imports led to an excess supply of steel. The production index further declined in the first half of FY16 due to excess supply and lower demand.

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Steel production capacity
2.3 Steel production
2.4 Steel demand
2.5 Steel exports
2.6 Steel imports
2.7 Steel prices
2.8 Raw materials
2.9 Pig iron
2.10 Sponge iron
2.11 Market outlook

3. Leading Players and Comparative Matrix
3.1 Leading players
3.1.1 Steel Authority of India Ltd (SAIL)
3.1.2 JSW Steel Limited (JSW)
3.1.3 Tata Steel Limited (Tata Steel)
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: Key financial ratios of the leading players-FYE Mar-15
Table 2: Half-year results of the leading players-1HFY16

Chart 1: Annual finished steel production in India
Chart 2: World crude steel production (2014)
Chart 3: Per capita steel consumption by country in 2014
Chart 4: Gross sales from integrated steel plants in India (in INR bn)
Chart 5: Excise revenues collected from the integrated steel plants
Chart 6: Excise revenues collected from the integrated steel plants
Chart 7: Results of Indian general elections 2014-Seat share
Chart 8: Current account deficit and fiscal deficit
Chart 9: Per capita steel consumption in India (in kg)
Chart 10: Process used in Indian steel production
Chart 11: Quarterly GDP growth rate-India (y/y change in %)
Chart 12: Average monthly USD to INR exchange rate
Chart 13: Monthly inflation-India (in %)
Chart 14: Repo rate (Benchmark interest rate in %)
Chart 15: Contribution of eight core industries in IIP by weights (FY13)
Chart 16: Y/Y change in Index of industrial production
Chart 17: Steel production capacity in India (in MTPA)
Chart 18: Planned capacity expansion by 2020 in different states (in MT)
Chart 19: Annual crude steel production in the country (in MT)
Chart 20: Capacity utilization of steel plants (in %)
Chart 21: Breakup of crude steel production by companies (FY14)
Chart 22: Y/Y change in crude steel production of major companies-FY14 (in %)
Chart 23: Real consumption of total finished steel in India (in million tonnes (MT))
Chart 24: Y/Y change in annual production surplus of finished steel in India (in MT)
Chart 25: Annual steel exports of finished steel from India (in MT)
Chart 26: Net exports of finished steel from India (in MT)
Chart 27: Annual steel imports of finished steel in India (in MT)
Chart 28: Estimated excess supply of finished steel in Indian market (in MT)
Chart 29: Price of steel hot and rolled coil (in USD/tonne)
Chart 30: Domestic price index of steel products in India (2004-05=100)
Chart 31: Iron ore exports from India (in MT)
Chart 32: Production of pig iron in India (MT)
Chart 33: Production of sponge iron in India (MT)
Chart 34: Forecast for consumption of finished steel in India (MT)
Chart 35: Annual crude steel production by SAIL (in MT)
Chart 36: Net sales of SAIL-Annual (in INR bn)
Chart 37: Profit margins of SAIL
Chart 38: Annual steel production by JSW (in MT)
Chart 39: Net sales of JSW-Annual (in INR bn)
Chart 40: Profit margins of JSW
Chart 41: Annual crude steel production by Tata Steel (in MT)
Chart 42: Turnover of Tata Steel-Annual (in INR bn)
Chart 43: Profit margins of Tata Steel

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