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Home Steel Sector DEVELOPMENT OF INDIAN STEEL SECTOR SINCE 1991

DEVELOPMENT OF INDIAN STEEL SECTOR SINCE 1991

Production of Iron & Steel for Sale | Import and Export of Iron & Steel | Apparent Consumption of Finished Carbon Steel | Additional Capacity Creation in Private Sector Since 1991

The economic reforms initiated by the Government since 1991 have added new dimensions to industrial growth in general and steel industry in particular. Licensing requirement for capacity creation has been abolished, except for certain locational restrictions. Steel industry has been removed from the list of industries reserved for the public sector. Automatic approval of foreign equity investment up to 100% is now available. Price and distribution controls have been removed from January 1992, with a view to make the steel industry efficient and competitive. Restrictions on external trade, both in import and export have been removed. Import duty rates have been reduced drastically. Certain other policy measures such as reduction in import duty on capital goods, convertibility of rupee on trade account, permission to mobilise resources from overseas financial markets and rationalisation of existing tax structure for a period of time have also benefited the Indian steel industry.

Production for Sale

a) Total Finished Steel Production for Sale

The production for sale of total finished steel (alloy/stainless + non-alloy) in the country was 90.98 million tonnes (mt) in 2015-16 as compared to 14.23 mt in 1991-92. The high share of the Majors and Other Producers (as per classification system prevailing till 2013-14) in total finished steel production for sale was largely due to substantial availability of raw materials, expansion of capacities and emergence of new units in these segments, among others.

Total Finished Steel (alloy+non-alloy): Production for sale (million tonnes)
Total Finished Steel (alloy/stainless +non-alloy): Production for sale (million tonnes)
Year Main
Producers
Majors and Other 
Producers
Production for sale % of share of
Majors and Other Producers
1991-1992 7.964 6.270 14.234 44.0
1992-1993 8.551 8.335 16.886 49.4
1993-1994 8.912 8.112 17.024 47.7
1994-1995 9.720 10.365 20.085 51.6
1995-1996 10.731 13.562 24.293 55.8
1996-1997 10.689 15.635 26.324 59.4
1997-1998 10.580 16.840 27.420 61.4
1998-1999 10.045 17.513 27.558 63.5
1999-2000 11.407 19.088 30.495 62.6
2000-2001 12.686 19.670 32.356 60.8
2001-2002 13.198 20.178 33.376 60.5
2002-2003 14.534 22.632 37.166 60.9
2003-2004 15.383 25.326 40.709 62.2
2004-2005 15.824 27.689 43.513 63.6
2005-2006 16.413 30.153 46.566 64.8
2006-2007 17.614 34.915 52.529 66.5
2007-2008 18.020 38.055 56.075 67.9
2008-2009 17.216 39.948 57.164 69.9
2009-2010 18.038 42.586 60.624 70.2
2010-2011 18.407 50.214 68.621 73.2
2011-2012 17.978 57.718 75.696 76.25
2012-2013 19.244 62.437 81.681 76.44
2013-2014 22.196 65.479 87.675 74.68
Source : JPC

Data on production for sale of total finished steel (alloy/stainless +non-alloy) for 2013-14 to 2015-16 and April-January 2016-17 is shown in the table below.

Total Finished Steel (alloy+non-alloy): Production for sale (million tonnes)
Period ISP Other Producers Less: IPT/Own consumption Grand Total % of share of Other Producers
2013-14 45.16 50.42 7.91 87.67 57.5
2014-15 46.82 53.86 8.52 92.16 58.4
 
Period SAIL, RINL, TSL,
ESL, JSW, JSPL
Other 

Producers
Less: IPT/Own consumption Production for sale % of share of

Other Producers
2015-16 48.53 54.37 11.92 90.98 60.0
Apr-Jan 2016-17* 46.89 44.49 8.37 83.01 54.0
Source : JPC *prov.

Note: Effective 1.4.2014, JPC reporting system had changed and under the new system, the Main Producers & Majors of the earlier system were reported as ‘Integrated Steel Plants (ISP)’ and all others, not falling in this category were grouped under the head, ‘Other Producers’. This reporting system, however, was for statistical use only. However, effective 12.5.2016, with the issue of Ministry of Steel notification on classification system, the JPC reporting system has again changed from 2015-16 onwards. It however, continues to be for statistical use only.

(b) Pig Iron Production for Sale

The total production for sale of pig iron was 9.23 mt in 2015-16 as compared to 1.59 mt in 1991-92. Earlier, pig iron was produced primarily by the integrated public sector steel plants, SAIL and RINL. In contrast, the private sector accounted for 92% of total production for sale of pig iron in the country in 2015-16.

Production for sale of Pig Iron (million tonnes)
Year Main Producers Majors & Other Producers Grand Total % share of Majors & Other Producers
1991-1992 1.490 0.100 1.590 06.3%
1992-1993 1.679 0.165 1.844 08.9%
1993-1994 1.977 0.273 2.250 12.1%
1994-1995 2.005 0.780 2.785 28.0%
1995-1996 1.813 1.060 2.873 36.9%
1996-1997 1.733 1.570 3.303 47.5%
1997-1998 1.711 1.687 3.398 49.6%
1998-1999 1.354 1.644 2.998 54.8%
1999-2000 1.226 1.955 3.181 61.5%
2000-2001 0.964 2.434 3.398 71.6%
2001-2002 1.016 3.055 4.071 75.0 %
2002-2003 1.107 4.178 5.285 79.1 %
2003-2004 0.966 3.980 4.946 80.5 %
2004-2005 0.625 2.603 3.228 80.6%
2005-2006 1.007 3.683 4.690 78.5  %
2006-2007 0.860 4.093 4.953 82.6%
2007-2008 0.936 4.348 5.284 82.3%
2008-2009 0.589 5.618 6.207 90.5%
2009-2010 0.731 5.153 5.884 87.6%
2010-2011 0.579 5.104 5.683 89.8%
2011-2012 0.502 4.869 5.371 90.65%
2012-2013 0.674 6.196 6.870 90.74%
2013-2014 0.552 7.398 7.950 93.06%
Source : JPC

Data on production for sale of pig iron for 2013-14 to 2015-16 and April-January 2016-17 is shown in the table below.

Pig iron: Production for sale (million tonnes)
Period ISP Other Producers Less: IPT/Own consumption Grand Total % of share of Other Producers
2013-14 0.71 7.64 0.40 7.95 96
2014-15 1.21 9.01 0.53 9.69 93
Period SAIL, RINL, TSL,
ESL, JSW, JSPL
Other 

Producers
Less: IPT/Own consumption Production for Sale % of share of

Other Producers
2015-16 1.29 8.95 1.01 9.23 97
Apr-Jan 2016-17* 0.74 7.59 0.48 7.85 91
Source : JPC

Note:Effective 1.4.2014, JPC reporting system had changed and under the new system, the Main Producers & Majors of the earlier system were reported as ‘Integrated Steel Plants (ISP)’ and all others, not falling in this category were grouped under the head, ‘Other Producers’. This reporting system, however, was for statistical use only. However, effective 12.5.2016, with the issue of Ministry of Steel notification on classification system, the JPC reporting system has again changed from 2015-16 onwards. It however, continues to be for statistical use only.

(c) DRI - Production for sale

The production for sale of DRI or Sponge Iron has increased from 1.31 mt in 1991-92 to 14.53 mt in 2015-16. India was the largest producer of DRI in the world during the period 2003 to 2015.

Production for Sale of Sponge Iron
Year Qty (million tonnes) % change over last year
1991-1992 1.306 -
1992-1993 1.441 10.3%
1993-1994 2.396 66.3%
1994-1995 3.392 41.6%
1995-1996 4.442 31.0%
1996-1997 5.047 13.6%
1997-1998 5.325 5.5%
1998-1999 5.166 (-) 3.0%
1999-2000 5.320 3.0%
2000-2001 5.481 3.0%
2001-2002 5.658 3.2%
2002-2003 7.858 38.9%
2003-2004 9.877 25.7%
2004-2005 12.537 26.9%
2005-2006   14.825 18.2%
2006-2007 18.345 23.7%
2007-2008 20.376 11.1%
2008-2009 21.091 3.5%
2009-2010 24.326 15.3%
2010-2011 25.081 4.2%
2011-2012 19.633 (-) 21.7%
2012-2013 14.329 (-) 27%
2013-2014 18.204 27%
2014-2015 20.378 12%
2015-2016 14.530 (-) 28.7%
Apr-Jan 2016-17* 12.390 (-) 0.8%
JPC, * prov

Import and Export of Iron & Steel

Import of Iron and Steel
Year Pig Iron Total Finished Steel (Non-Alloy + Alloy) Total Value (Pig Iron + Steel)
('000 tonnes) ('000 tonnes) (Rs. In Crores)
1991-1992 152 970 1441.32
1992-1993 73 1143 1676.00
1993-1994 21 1119 1613.00
1994-1995 1 1775 2536.00
1995-1996 8 1617 3181.00
1996-1997 15 1632 3053.00
1997-1998 3 1648 2904
1998-1999 2 1194 N.A.
1999-2000 3 1678 N.A.
2000-2001 2 1491 2659
2001-2002 2 1373 2560
2002-2003 1 1663 3051
2003-2004 2 1753 3728
2004-2005 8 2293 6244
2005-2006 3 4305 11585
2006-2007 3 4927 15747
2007-2008 11 7029 24977
2008-2009   8 5841 30509
2009-2010 11 7382 25983
2010-2011 9 6664 26996
2011-2012 8 6863 27017
2012-2013 21 7925 39347
2013-2014 34 5450 30525
2014-2015 23 9320 44994
2015-2016 22 11711 45066
Apr-Jan 2016-17* 32 6100 28722
Source : JPC * prov

Although India started exporting steel way back in 1964, exports were not regulated and depended largely on domestic surpluses. However, in the years following economic liberalisation, export of steel recorded a quantum jump. Subsequently, the rapid growth of domestic steel demand has led to a decline in the rate of growth of steel exports from India to ensure that domestic requirements are adequately met.

Export of Iron and Steel
Year Pig Iron Semis Total Finished Steel  (Alloy+Non-Alloy) Total Steel* Total Steel : Value
('000 tonnes) ('000 tonnes) ('000 tonnes) ('000 tonnes) (Rs. Crores)
1991-1992 - 5 368 373 283
1992-1993 16 154 756 910 708
1993-1994 620 585 1060 1645 1678
1994-1995 466 399 944 1343 1438
1995-1996 503 391 1350 1741 1939
1996-1997 451 300 1662 1962 2231
1997-1998 785 503 1934 2437 2512
1998-1999 276 174 1860 2034 N.A.
1999-2000 290 328 2782 3110 N.A.
2000-2001 232 194 2671 2865 N.A.
2001-2002 312 281 2709 2990 N.A.
2002-2003 629 460 4517 4977 N.A.
2003-2004 518 684 5207 5891 12132
2004-2005 393 261 4705 4966 15123
2005-2006   440 388 4801 5189 17152
2006-2007   707 665 5242 5907 18671
2007-2008 560 373 5077 5450 17771
2008-2009   350 746 4437 5183 18978
2009-2010 362 625 3251 3876 15206
2010-2011 358 350 3637 3987 18433
2011-2012 491 198 4588 4789 21946
2012-2013 414 144 5368 5512 26912
2013-2014 943 486 5985 6471 31315
2014-2015 540 640 5595 6235 31283
2015-2016 297 639 4079 4718 24083
Apr-Jan 2016-17* 201 902 5865 6767 27392
Source : JPC; **Total Steel = Semis+ Total Finished Steel; *prov.

Apparent and Real Consumption of Total Finished Steel

Real Consumption is obtained from apparent consumption (i.e production + imports – exports +/- variation in stocks) of total finished steel after adjusting for double counting in flat products. The trend in real consumption of total finished steel is shown below, year-wise.

Apparent and Real Consumption of Total Finished Steel
Year Real Consumption of Total Finished Steel (million tonnes)
1991-1992 14.836
1992-1993 15.811 (6.6%)
1993-1994 16.114 (2.0 %)
1994-1995 19.550 (21.3 %)
1995-1996 22.370 (14.4 %)
1996-1997 23.294 (4.1%)
1997-1998 23.808 (2.2%)
1998-1999 24.710 (3.8%)
1999-2000 26.348 (6.6%)
2000-2001 27.649 (4.9%)
2001-2002 28.523 (3.2%)
2002-2003 30.677 (7.6%)
2003-2004 33.119 (8%)
2004-2005 36.377 (9.8%)
2005-2006 41.433 (13.9%)
2006-2007 46.783 (12.9%)
2007-2008 52.125 (11.4%)
2008-2009 52.351 (0.4%)
2009-2010 59.339 (13.3%)
2010-2011 66.423 (11.9%)
2011-2012 71.021 (6.9%)
2012-2013 73.482 (3.5%)
2013-2014 74.095 (0.82%)
2014-2015 76.994 (3.9%)
2015-2016 81.525 (5.9%)
Apr-Jan 2016-17* 68.895 (3.5%)
Source : JPC; figures in brackets indicate the percent increase over the previous year *prov.

Additional Capacity Creation in Private Sector Since 1991

After de-licensing of Indian iron and steel industry and as a result of the steps taken for creation of additional capacity in the private sector, projects involving a total investment of Rs. 30,835 crores equivalent to a capacity of approx. 13 million tonnes per annum were cleared by financial institutions.

Over time, with further opening up of the Indian economy, a focused reform process in place and a rapid but stable growth of the Indian economy, investments have flown significantly into the steel industry of the country with major investment plans announced in the states of Odisha, Jharkhand, Karnataka, Chhattisgarh and West Bengal. The government has also unveiled plans of developing four mega greenfield steel plants each of 6 mtpa, through the SPV route, at an estimated combined investment of $24 billion in the states of Chhattisgarh, Odisha, Jharkhand and Karnataka. Rapid strides have also been made towards further progress and/or commissioning of new capacities like those in case of SAIL-RSP, SAIL-ISP, RINL, NMDC, Tata Steel, JSPL, JSW Steel, Essar Steel among others. Crude steel capacity in the country stood at 121.97 million tonnes in 2015-16 as per data released by the JPC.

Global steel giants have also announced plans to set up integrated steel plants in the country either through setting up of green-field integrated steel plants in the country or strategic tie-ups, which is expected to introduce state-of-the-art technology into steel making. These include either independent projects like those of Posco (Odisha, Karnataka) and Arcleor-Mittal (Jharkhand, Karnataka) or joint venture projects with local companies like those of SAIL-Kobe, SAIL-Posco, JSW Steel-JFE, among others.