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Last Updated on : May 26, 2010

DEVELOPMENT OF INDIAN STEEL SECTOR SINCE 1991

Production of Iron & Steel | 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 upto 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 of 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 of Iron & Steel

(a)Finished Carbon Steel Production

The total production of finished carbon steel in the country has been 65.465 million tonnes in 2009-10 as compared to 14.33 million tonnes in 1991-92. The high share of the secondary sector in finished steel production is largely due to substantial supplies of semis, the basic feed material from the main producers for conversion to needed shapes by rolling.

PRODUCTION OF FINISHED CARBON STEEL  (In million tonnes)

Year

Main
Producers

Secondary
Producers

Grand
Total

% of share of
Secondary Producers

1991-1992

7.96

6.37

14.33

14.5%

1992-1993

8.41

6.79

15.20

44.7%

1993-1994

8.77

6.43

15.20

42.3%

1994-1995

9.57

8.25

17.82

46.3%

1995-1996

10.59

10.81

21.40

50.6 %

1996-1997

10.54

12.18

22.72

53.6 %

1997-1998

10.44

12.93

23.37

55.32 %

1998-1999

9.86

13.24

23.82

57.32 %

1999-2000

11.20

15.51

26.71

58.07 %

2000-2001

12.51

17.19

29.7

57.88 %

2001-2002

13.05 17.58 30.63 57.40 %
2002-2003 14.39 19.28 33.67 57.27 %
2003-2004 15.19 21.00 36.19 58.03 %
2004-2005 15.61 24.44 40.05 61.02 %
2005-06 (Prov.) 16.236 26.400 42.636 61.92 %
2006-2007 17.390 37.756 55.146 68.46 %
2007-2008 17.765 40.565 58.233 69.54 %
2008-2009 17.216 46.229 63.445 72.86%
2009-2010 17.900 46.565 65.465 72.66 %

(Source : JPC)


(b) Pig Iron Production

The total production of Pig Iron was 5.796 million tonnes in 2009-10 as compared to 1.59 million tonnes in 1991-92. Earlier Pig Iron was produced primarily by the integrated steel plant of SAIL and RINL. Of late, the share of stand-alone pig iron units has increased significantly.

PRODUCER - WISE PRODUCTION OF PIG IRON (In million tonnes)

Year

Main
producers

Secondary
producers

Grand
total

%age share of the
Secondary Producers

1991-1992

1.49

0.10

1.59

6.3%

1992-1993

1.68

0.17

1.85

9.2%

1993-1994

1.98

0.27

2.25

12.0%

1994-1995

2.01

0.78

2.79

28.0%

1995-1996

1.74

1.06

2.80

37.9%

1996-1997

1.73

1.57

3.30

47.5%

1997-1998

1.70

1.68

3.39

49.5%

1998-1999

1.37

1.60

2.97

53.87%

1999-2000

1.24

1.94

3.18

61.08%

2000-2001

0.96

2.15

3.11

69.13%
2001-2002 1.02 3.05 4.07 75.04 %
2002-2003 1.11 4.18 5.29 79.05 %
2003-2004 0.97 4.25 5.22 81.48 %
2004-2005 0.625 2.603 3.228 80.63 %
2005-06 (Prov) 1.006 2.850 3.856 73.91 %
2006-2007 0.860 4.133 4.993 82.77%
2007-2008 0.936 4.378
5.314
 82.38 %
2008-2009 0.589 5.662 6.211 90.51 %
2009-2010
(Prov)		 0.731 5.065 5.796 87.38 %

(Source : JPC)

(c) DRI Production

The production of DRI has increased from 1.31 million tonnes in 1991-92 to 20.738 million tonnes in 2009-10. India has emerged as the second largest producer of DRI in the world after Venezuela.

PRODUCTION OF DRI (In million tonnes)

Year

Production

% increase

1991-1992

1.31

-

1992-1993

1.60

22.1%

1993-1994

2.40

50 %

1994-1995

3.39

41.3%

1995-1996

4.34

28.02%

1996-1997

5.05

16.4 %

1997-1998

5.32

5.34%

1998-1999

5.12

(-)3.8%

1999-2000

5.34

4.30%

2000-2001

5.44

1.90%
2001-2002 5.40 (-) 0.70 %
2002-2003 6.91 27.96 %
2003-2004 8.08 16.93 %
2004-2005 10.296 -
2005-06
(Apr-Dec)		 12.50 21.4 %
2006-2007 18.345 -
2007-2008 20.376 -
2008-2009 21.091 -
2009-2010
(Prov)		 20.738 -

(Source : JPC)

Import and Export of Iron & Steel

IMPORT OF IRON AND STEEL (In '000 tonnes)

Year

Pig Iron

Steel
TOTAL(CARBON)

Total Value
(Pig Iron + Steel)
(Rs. In Crores)

1991-1992

152

1043

1441.32

1992-1993

73

1115

1676.00

1993-1994

21

1153

1613.00

1994-1995

1

1936

2536.00

1995-1996

8

1864

3181.00

1996-1997

15

1822

3053.00

1997-1998

3

1815

2904

1998-1999

2

1637

N.A.

1999-2000

3

2200

N.A.

2000-2001

2

1632

N.A.
2001-2002 2 1375 N.A.
2002-2003 1 1510 N.A.
2003-2004 2 1650 .N.A.
2004-2005 8 2109 N.A.
2005-2006 3 3850 N.A.
2006-2007
(Partly Estamited)		 3 4436 N.A.
2007-2008 11 6581 N.A..
2008-2009
8 5839 N.A.
2009-2010
(Partly Estamited)
 11 7296 N.A.

(Source : JPC)


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.

EXPORT OF IRON AND STEEL (In '000 Tonnes)

Year

Pig Iron

Semis

Finished
Carbon Steel

Total
Steel

Total Value
(Rs. Crores)

1991-1992

-

5

368

373

283

1992-1993

16

154

741

895

708

1993-1994

620

585

1020

1605

1678

1994-1995

466

399

873

1272

1438

1995-1996

502

395

925

1320

1939

1996-1997

451

300

1622

1922

2231

1997-1998

785

503

1880

2383

2512

1998-1999

281

174

1770

1944

N.A.

1999-2000

290

328

2670

2998

N.A.

2000-2001

230

195

2805

3000

N.A.

2001-2002

242 270 2730 3000 N.A.
2002-2003 629 460 4506 4966 N.A.
2003-2004 576 701 5221 5922 N.A.
2004-2005 393 261 4381 4903 N.A.
2005-06
440 350 4478 4828 N.A.
2006-2007
(Partly Estimated)		 350 665 4750 5415 N.A.
2007-2008 560 373 4627 5000 N.A.
2008-2009
350 746 4437 5183 N.A.
2009-2010
(Partly Estamited)		 278 355 3235 3690 .N.A.

(Source : JPC)


Apparent Consumption of Finished Carbon Steel

Apparent consumption (i.e production + imports - exports +/- variation in stocks) of finished steel, year-wise, has been shown below. Apparent consumption represents the actual demand of steel in a particular period/year. It has increased from 14.84 million tonnes in 1991-92 to 56.475 in 2009-10.

 

APPARENT CONSUMPTION OF THE FINISHED STEEL(CARBON)
(in million tonnes)

Year

Apparent Consumption of Finished Steel

1991-1992

14.84

1992-1993

15.00 (1.2 %)

1993-1994

15.32 (2.0 %)

1994-1995

18.66 (21.8 %)

1995-1996

21.43 (14.8 %)

1996-1997

22.12 (3.2%)

1997-1998

22.63(2.3%)

1998-1999

23.15(2.3%)

1999-2000

25.01(8.03%)

2000-2001

26.87(7.44%)
2001-2002 27.350 (3.1%)
2002-2003 28.897 (5.32%)
2003-2004 31.169 (7.88%)
2004-2005 34.389 (10.33%)
2005-06 (Prov) 38.151 (10.9%)
2006-2007 49.777 (30.47%)
2007-2008 52.125 (4.7%)
2008-2009 52.351(0.4%)
2009-2010
(Prov)		 56.475 (7.9%)

(The figures in brackets indicate the percent increase over the previous year/corresponding period.)

(Source : JPC)

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, 19 projects involving a total investment of Rs. 30,835 crores equivalent to a capacity of approx. 13 million tonnes per annum have already been cleared by Financial Institutions and are in various stages of implementation. Already 8 units with a total capacity of Approx 5.45 million tonnes have already been commissioned.