2. Indian Metals Market- Overview
Key sector – vital to Indian Economy meets wide range of
industries- Engineering, Infrastructure, Electrical and
Automobile …
Metal Industry can be classified under- Ferrous/ Non-
Ferrous Metals.
Ferrous Metals – mainly consists of – Iron/ Steel – Indian
Steel Industry Story is much of the global headlines- eg:
Mittal’s acquisition of Arecelor, France….
Steel Industry accounts for close to 2% Indian GDP and
brings in excess of 10% of revenues through- Excise Duty
and employs more than 1 million directly and indirectly.
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3. Indian Metals Market- Overview
Non- Ferrous Metals- Copper/Aluminium / Zinc/
Lead/ Tin/ used for making alloys, castings, forgings
& extrusions …
Non Ferrous Metals – used widely in agriculture/
infrastructure/ power plants/ railways/
telecommunications/ core sector…
Industry is highly fragmented- organized/
unorganized across ferrous and non- ferrous groups.
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4. Industry Dynamics
Indian Ferrous industry- comprises of- Miners &
Producers- engaged in mining & extracting activities
Indian iron ore mines are seen across- Jharkhand/ Orissa/
West Bengal/ Karnataka/Chattisgarh
Producers – are classified - Integrated Steel Producers (
ISS)and Secondary Producers. Integrated Steel Producers-
Tata Steel/ SAIL/
ISS occupies close to two thirds of Indian Crude Steel
Producing…
Secondary Producers- forms the other one- third of the
steel production, but they are under both organized and
un organized segments.
Greater fragmentation, greater the competition.
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5. Drivers & Trends
Steel Sector
Significance- India’s steel industry is significant, even
by global standards. With an installed capacity of 36.12
million tones, India is the eighth largest steel producer
in the world.
The industry has presence across all sectors – ore
miners, integrated producers and other producers
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6. Drivers & Trends
Ore Miners- Mining companies are engaged in mining
iron ore , key players – NMDC/ KIOSL/ Sesa Goa
Main Producers- can be classified based on – Production
Process/ Types of Products manufactured by the
producers.
Production Process- producers use three types of processes
for converting iron ore into steel to coke oven- BF/ BOF
route/ electric arc furnace ( EAF rout.e) or corex process
Product based Manufacturing- Products-Long Products /
Flat Products
Long Products- bars, structural products, wire rods, angles,
rounds – Mainly used in Construction/ Infrastructure
industry.
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7. Drivers & Trends
Flat Products- includes the famous- HRC Coils ( Hot
Rolled Coil Sheets)/ CRC- Cold Rolled Coil Sheets…
Long Products Players- RINL SAIL/ Tata Steel/
Flat Products- Ispat/ Jindal / Bhushan Steel- widely
used in white goods/ automobile sector/ fabrications/
ducts / roofing/
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8. Drivers & Trends Drivers & Trends-
Metals- Aluminium
Aluminium – India accounts for nearly 10 per cent of the
world’s bauxite reserves.
Domestic Demand is expected to grow annually – CAGR 8-
10 per cent in 2005- 06 and by 2020, India is expected to
have an installed aluminium capacity of 1.7 to 2 million
tones per annum.
The primary market for aluminium in India is the power
sector,
which consumes about 35 per cent of the domestic
production.
Key Drivers- The ongoing reforms in the power sector and
focus on improving power infrastructure, is expected to
further boost the aluminium sector in India.
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9. Drivers & Trends- Metals- Copper
Copper- One of the key sector impacting the Indian
economy.
Utilities- Telecom/ Power/ Construction/
Engineering/ Consumer Durables.
According to Ministry of Steels, GOI, the installed
capacity in 2003-4 is 477,500 vs. domestic demand
about 290,000 tones. Nearly 40% of copper is
exported.
Potential for Huge Demand- across ASEAN regions/
South Asia/ SL etc
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10. Drivers & Trends- Metals- Copper
Major Players- Sterlite/ Hindustan Copper Limited/
Hindalco/
Three major players control more than 85% of market
share, while the rest is controlled by small scale industries
who are primarily converting scrap into ingots.
Products- Copper bars/ rods/ wires…
Correlation Effect- Highly dependent on- Telecom/ Power
sector
Growth- CAGR of 5-6% is growth witnessed for last 20
years, with Indian economy peaking around 7-8% GDP for
most of 2004-7, the outlook for copper is positive.
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11. Drivers & Trends- Metals- Zinc
Key Players- Hindustan Zinc Ltd, part of Sterlite
Group.
Domestic Demand- 400,000 tones per annum, annual
CAGR of 5-6% on Y- Y basis.
Domestic Markets- Zinc is predominantly used in
Steel Industry for galvanizing, die-casting, guard rails
used in railways
Key Driver- Continuing demands from Construction
industry- creates multiplier effects for steel& zinc
products…
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12. Drivers & Trends- Exports
India – net exporter of steel around $3.3 billion, in 2006-07.
Major areas of export-
China- 24%
US- 8%
UAE- 5%
Thailand- 5%
Italy – 4%
Iran – 4%
Indian exports consists mainly carbon steel which accounts
for 95% of steel exports, rest being the pig iron.
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13. Drivers & Trends- Imports
Major steel import destinations are- BRICS /
Germany/ Korea/
In non-ferrous metals, India is net exporter of
copper and net importer of zinc
Opportunity- Given the surplus production of metals
and requirements in other markets gives greater
opportunity for growth in exports for Indian metals
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14. Business Confidence – Metal
Sector
FDI continued to get attracted in metallurgical sector
since, 1991.
During the phase of 1991-2005 phase- FDI in
metallurgical sector accounted to - $4.5bn
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15. Competitive Index
• India’s cheaper labor
India’s cheaper workforce
market backed with skilled
workforce are advantages
and skilled low cost
for setting up- workforce is
production domestic bases
• Liberal policy regime
• Foreign equity is allowed
100% in FDI under
automatic conditions
advantageous to create low-
for local and international
Indian competitive index is illustrated by Michael
cost production bases for
markets.
both local & international
Porter’s Competitive Analysis:
markets
strategy/
Factor
Firm
Conditions
structure
Related &
Demand
Supporting
Conditions
Industries
• Matured industry • Users- constructions/
automobile/ engineering/
• Highly demanding
consumers
• Demand and industry
growth high correlation
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16. Michael PorterCompetitive Index
India growth oriented market
Favorable conditions for production
Support from allied industries
Government- Policy enabling climate for Metal
industry.
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18. Future Perfect
Future outlook - Metals sector in India is shining bright
Indian Economy poised to grow at 8-10%GDP for next 20
years, the demand is very clearly defined- increased
infrastructure- construction- engineering – automobile
sector headed for bullish phase- young demographics-
higher potential to spend and consumption
Greater shortages in worldwide copper supplies are
expected to continue due to production cuts by leading
producers in Mexico and Chile.
Opportunity Management- Utilizing the demand and
production cuts in Mexico/ Chile, augurs well for Indian
Metal industry in the near and long term.
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19. Thank You
Ram Prasad
F 21 Meenakshi Residency
Arekere, Baneerghata Road
Bangalore 560076
ramprasad2020@yahoo.com
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