A Review of developments in
The Global & Indian Steel Industry
Monthly Special edition
Issue No. 35
February 2019 (Covering January 2019)
Compiled on behalf of Indian Steel Association,
By Mr. Anup Kashyap,
Senior Executive-Technical
Strictly for Internal circulation
About the Report
❑ The Indian Steel Association introduced a monthly report titled ‘A REVIEW
OF DEVELOPMENTS IN GLOBAL & INDIAN STEEL INDUSTRY’, from August
2016.
❑ The report provides general background information reviewing the status
of the developments in the global and Indian steel industry, pertaining to
raw material, production & consumption, trade, shipping, pricing &
forecasts, country reportage, policy developments, economic parameters
etc.
❑ The consistent format of the report provides an insight into the relevant
aspects of steel scenario globally and domestically .
❑ The information has been sourced from independent third party databases,
knowledge sources and news reports, and the authenticity of the same has
not been independently verified by ISA.
❑ The report is issued in the last week of each month to the members of
Indian Steel Association , various ministries / departments / institutions.
Contents of the Report
SI.
No
Title Page
Number
1. Global Economic Development 4-8
2. Global Steel Development 9-16
3. Domestic Steel Development 17-22
4. Indian Economic Development 23-25
5. About ISA 26-32
GLOBAL ECONOMIC DEVELOPMENTS
4
Source: Global Forecasting Service,
Country-wise Growth Forecasts
2019 - 2023
As of February 13th , 2019
The assumptions for forecasts are available on the website of the Economist Intelligence Unit
In % 2019 2020 2021 2022 2023
India
Real GDP Growth 7.4 7.2 7.5 7.4 7.1
Inflation 3.3 3.2 3.9 4.4 4.1
China
Real GDP Growth 6.3 6.1 5.6 5.3 5.0
Inflation 2.7 2.5 2.6 2.8 2.7
U.S.A
Real GDP Growth 2.3 1.5 1.7 2.0 1.8
Inflation 2.2 1.4 2.2 2.1 1.8
Japan
Real GDP Growth 1.2 0.4 1.2 1.0 1.0
Inflation 1.5 1.7 1.0 1.2 1.4
EU 28
Real GDP Growth 1.5 1.6 1.8 1.9 1.8
Inflation 1.7 1.7 1.9 2.0 1.9
5
Source: Report on Global Economic Scenario-Feb 2019 by Advisor Economic and Perspective
Summary of Global Economic Outlook
Feb.2019
➢ After two years of solid growth, a synchronized global slowdown is underway. The U.S.
economy appears to have lost momentum, growth has been falling in the eurozone, China
is struggling to sustain economic momentum and lingering Brexit-related uncertainty
continues to take a toll on the British economy. This has raised concerns about the longevity
of the current expansion.
➢ The U.S. economy will downshift naturally as the impact of fiscal stimulus from tax reform
wanes and monetary policy normalization continues. Even though we envisage a gradual
decline in U.S.-China trade tensions, the Chinese economy should continue to moderate
amid weaker external demand and internal rebalancing. European growth should recover
from the recent soft patch as favourable domestic drivers are still in place. And we continue
to expect a “soft” Brexit that broadly maintains strong commercial ties with the European
Union.
➢ The key downside risks to this outlook are an escalation or broadening of the U.S.-China
trade war, a disorderly Brexit and another rise in populist sentiment.
6
Source:Report on Global Economic Scenario-Feb 2019 by Advisor Economic and Perspective
Country Wise Development in Economy
Feb.2019
▪ United States-U.S. consumers and businesses alike have benefitted from lower energy prices, which
have stabilized after a steady descent in the fourth quarter. This fall will contain the growth of
headline inflation. The combination of below-target inflation and delayed data releases from the
shutdown gives us confidence that the Federal Reserve will undertake no rate actions until mid-year.
▪ China- The Chinese government’s drive to scale back leveraging along with the current trade frictions
with the U.S. are the key challenges currently faced by the Chinese economy. China’s full-year growth
of 6.6% in 2018 was its slowest pace since 1990. Chinese households are also holding off their
spending amid heightened uncertainties.
▪ Japan- Consumption and investment are likely to be the engines of growth this year and next, as
moderating global growth and rising protectionist sentiment weigh on exports. A healthy labour
market will provide impetus to consumption, while investments will remain firm in preparation for the
2020Tokyo Olympics.
▪ Eurozone- Exports, which were a key contributor to growth over the past few quarters, will prove to
be a drag amid a slowing global landscape, but domestic fundamentals will continue to underpin the
economy. Consumption should remain strong in 2019 as unemployment continues to trend lower,
inflation has moderated due to falling oil prices, wages should continue to rise and monetary policy
will likely remain supportive.
7
Source:UNCTAD Global Investment Trends Monitor.
311
144
85
68
66
60
60
58
50
45
0 50 100 150 200 250 300 350
USA
China
Hong Kong,China
Netherland
Ireland
Australia
Brazil
Singapore
France
India
Country With highest FDI inflows in US $ Billion
US $ Billion
Top 10 countries with highest FDI Inflows
2018
8
GLOBAL STEEL DEVELOPMENTS
9
Source: World steel Association
➢ World crude steel production for the 64 countries reporting to the World Steel
Association (world steel) was 146.7 million tonnes (Mt) in January 2019, a 1.0%
increase compared to January 2018.
➢ China’s crude steel production for January 2019 was 75.0 Mt, an increase of 4.3%
compared to January 2018.
➢ India produced 9.2 Mt of crude steel in January 2019, down 1.9% on January
2018.
➢ Japan produced 8.1 Mt of crude steel in January 2019, down 9.8% on January
2018.
➢ South Korea’s crude steel production stood at 6.2 Mt, down 1.5% on January
2018.
➢ In the EU, Italy’s crude steel production for January 2019 was 2.0 Mt, down by
3.6% on January 2018. France produced 1.2 Mt of crude steel in January 2019, a
decrease of 9.7% compared to January 2018. Spain produced 1.2 Mt of crude
steel in January 2019, an increase of 5.9% on January 2018.
Global Crude Steel Output
10
Source: World Steel Association
➢ Total Crude steel production for January 2019 was 146 MT.
➢ The region wise crude steel production is provided in the chart below.
Region Jan 2019 in (MT) Jan 2018 in (MT) % Change
EU-28 13.802 14.306 -3.5
CIS 8.32 8.62 -4.3
N. America 10.512 9.798 7.3
S. America 3.647 3.558 2.5
Africa 1.22 1.291 -5.4
Middle East 3.226 3.227 ---
Asia 102.55 100.24 2.3
Oceania 0.523 0.552 -5.2
World 146.705 145.183 1.0
Region wise Crude Steel Production-2018
➢ Year on Year this reflects an increase of crude steel production of 1.0 %.11
Source: World Steel Association
Top 10 Crude Steel Producing Nation
Jan. 2019
Rank Nation Jan. 2019
(in MT)
1 China 75.013
2 India 9.180
3 Japan 8.141
4 United States 7.647
5 South Korea 6.211
6 Russia 5.790
7 Germany 3.410
8 Brazil 2.933
9 Turkey 2.565
10 Iran 2.230
• Table lists world’s top ten nations with regards to total crude steel output in Jan 2019.
12
Source: Steel Mint price analysis
GLOBAL STEEL PRICES
➢ Global HRC export offers reported significant surge after Lunar New Year holidays in China
and Improved buying from Overseas buyers.
➢ Chinese HRC export offers moved up by USD 10-20 per tonne post lunar New year holidays,
Meanwhile Chinese mills are increasing HRC prices both in domestic and export market amid
hike in iron ore prices due to accident in one of vale’s mines in Brazil.
➢ Domestic prices in eastern China are hovering around RMB 3840-3850 per tonne.
13
Source: Coal Mint
➢ Seaborne metallurgical coal prices are gradually trending up with Chinese buyers slowly
returning to the market although trading activity appears thin due to lack of urgent
demand from end users.
➢ However seller sources expect restocking activities to take place in near term amid limited
supply of cargoes with March and April respectively.
Trend in Coking Coal Price chart
14
Source: Steel Mint
Others 60%
South Korea10%
Vietnam10%
Philippines7%
Thailand5%
Indonesia5%
India3%
Others South Korea Vietnam Philippines
Thailand Indonesia India
➢ The Chinese steel exports that have supported the rising country’s crude steel output when
domestic demand faltered in the past , are once again likely to rebound this year.
➢ After a fall of 30.6% in 2017 exports have continued to fall by 8.1% to 69.5 million tonnes in
2018.This plunge in the country’s export volumes in 2017 and 2018 has largely been
attributed to improved domestic demand, the shutdown of illegal steel production and
increasing protectionist measures by importing countries.
➢ Amid the increased production and tepid
domestic demand in the absence of any
government stimulus ,Chinese steel export
may possible see some rebound this year
especially to Asian Countries. This is
because while steel prices in China have
slipped amid concern of a Steel supply glut
and weakening construction demand ,steel
may still maintain output if they keep steel
margins positive by switching back to
cheaper low grade ores, and away from the
more expensive higher grade ores and
scrap usage.
Country wise Chinese Steel Export in 2018
Trend in Chinese Steel Export
15
Source: Steel Mint
Trend in South Korean Flat Steel Export
➢ As per latest custom data, South
Korea flat steel export which
includes 7208 (HR
Coils/Plates),7209 (CR coils),7225
(Electrical Sheets),7210/7212
(GP/GC) witness surge of 20% in
monthly basis in to 2.14 MT in
Jan’19 which was 1.78 MT in
Dec’18.
➢ South korea has actively exported
flat steel to China, Japan and
India. In the month of Jan ‘19,
South Korea has actively
exported HRC to India amid
cheaper global prices along with
zero import duty. Thus Effective
imports compared to Indian HRC
prices results to surge in export
from Korea.
➢ On yearly basis, South korea flat
steel exports remained stable at
2.14 MT in Jan’19 and Jan’18.16
DOMESTIC STEEL DEVELOPMENTS
17
Source: JPC DO Report 2019
Indian Steel Scenario
April- January 2019.
Items
Indian Steel Scene(Million Tons)
April-Jan. 18-19
(Prov.)
April-Jan17-18
(Final)
% Change
(Prov.)
Crude Steel
Production88.05 85.08 3.5
Hot Metal Production59.97 56.03 6.5
Pig Iron Production5.01 4.76 5.2
Total Finished Steel ( Alloy + Non Alloy)
Production 109 104 4.4
Import 6.5 6.4 1.5
Export 5.14 8.21 -37.3
Consumption 79.96 74.19 7.8
18
Source: Steel Mint and Ministry of Coal and Mines, MT-Million tones
Indian Steel Scenario - CY 17 Vs. CY 18
Commodity Production (MT) Export (MT) Import(MT)
Iron
Ore
CY 2018 203 10.5 15.8
CY 2017 203 19.9 5.5
Y-o-Y (%) 0 -47 187
Coal
CY 2018 706.1 X 242.5
CY 2017 667.0 X 215
Y-o-Y (%) 6 X 13
Coking
Coal
CY 2018 - X 53.18
CY 2017 - X 51.32
Y-o-Y (%) - X 4
HRC
CY 2018 31.33 3.14 2.44
CY 2017 33.15 5.46 2.41
Y-o-Y (%) 5.6 42 1
CRC
CY 2018 8.42 0.82 0.47
CY 2017 7.01 1.51 0.41
Y-o-Y (%) 20 45 15
19
Source: Steel Mint Research, One tonne of crude steel production requires about 1.6 times of Iron Ore
Trend In Domestic Iron ore prices
5800 58005700
5600
5600 5800
6100 6100
6600
6650
6350
6100
5550
IRON ORE PRICE RS. PER TONNEDomestic Iron Ore(Fe-62%), Price-Rs. Per tonnes
Inclusive of Royalty , DMF, NMET and GST @5%
DMF-District Mineral Foundation
NMET-National Mineral Exploration Trust
Size-5-18 mm, Rungta Mines
➢ Domestic Iron Ore price has shown a decline in price to Rs. 5550 per tonne during the
month of January 2019.
➢ But it is predicted that the prices of Domestic Iron Ore will rise tremendously in coming
months due to the rise in pellet price and rise in global price
➢ The prices for Rungta Mines (Odisha) for Size-5-18 MM with Iron content 62 %.
20
Source: Steel Mint Research, One tonne of crude steel production requires 0.8 tonne of coking coal
Trend In Coking Coal Imports & prices
262
215233
198 188 200 199 174
201 217 230 221211
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19
COKING COAL PRICE $ PER TONNECoking Coal Price-$ per tonne
CNF India, Premium HCC
Australia
➢ Indian Coking Coal import shipment continued
to be originated from Australia constituting 70 %
of total imports .
➢ The prices of Coking coal were around $ 211 per
tonnes(Rs 14981 per tonne) for premium HCC.
➢ India imported a total of 53 MT of coking coal
for the CY 2018.
21
Source: Steel Mint
➢ Domestic Steel manufacturers have raised the HRC and CRC prices by INR 500-100 per
tonnes in February 2019 in domestic market . In the first instant ,the prices was raised by
500 Rs/tonne and therefore by Rs 1000 per tonne in the second instant.
➢ Thus in the month of February 2019 HRC price were in the range of Rs. 42000-42500 per
tonnes and CRC are in the range of Rs. 47000-47,500 (ex- Mumbai).The prices are basic
excluding GST @18 %,
Trend In Domestic Steel Prices
22
INDIAN ECONOMIC DEVELOPMENT
23
Source: Ministry of Finance, Govt. Of India
➢ The Indian economy grew 7.1 per cent year-on-year in first quarter (Q2) of FY 2018-19, as
per the Estimates of Gross Domestic Product by Central Statistics Office (CSO).
➢ India's foreign exchange reserves were US$ 396.68 billion as of the week up to January 25,
2019, as compared to US$ 397.35 billion over the past week.
➢ India’s Index of Industrial Production (IIP) advanced by 0.5 per cent year-on-year in
November 2018, as against a rise of 8.4 per cent year-on-year in October 2018. The
cumulative IIP growth for April-November 2018 was 5.0 per cent over the same period in
2017-18.
➢ The eight key infrastructure sectors rose 2.6 per cent year-on-year in December 2018, with
steel exhibiting the maximum growth of 13.2 per cent. The cumulative growth during April-
December 2018 was 4.8 per cent.
➢ Domestic passenger vehicle sales increased 4.4 per cent in April-December 2018 over the
same period last year.
➢ Total Merger and Acquisition (M&A) activity grew 104.5 per cent year-on-year to reach US$
129.4 billion in 2018.
➢ Total value of Private Equity (PE)/venture capital (VC) investments grew 35 reached to
reach US$ 35.1 billion in value terms in 2018.
Facts About Indian Economy
24
Source: Reserve Bank of India
CurrencyDate
20th Feb. 2019
I USD 71.17
1 EUR 80.70
1 GBP 92.92
100 YEN 64.21
Base Rate : 8.95-9.45 %
Savings Deposit Rate : 3.50-4.00 %
MCLR (Overnight) : 8.15-8.55 %
Term Deposit Rate > 1 year : 6.25-7.50%
Policy Repo Rate : 6.25 %
Reverse Repo Rate : 6.00 %
Marginal Standing Facility Rate : 6.50 %
Bank Rate : 6.50 %
CRR : 4 %
SLR : 19.25 %
Reference Rates
Lending/ Deposit Rates
Reserve RatiosPolicy Rates
Rates at Reserve Bank of India
2019
25
ABOUT ISA
26
About ISA
➢ The Indian Steel Association (ISA) is the voice of the Indian Steel Industry,
in both domestic and global forums. It is at the forefront of all
deliberations pertaining to matters of public & regulatory policy, raw
materials, international trade, logistics, environmental concerns,
technology and other aspects of steel-making. The Indian Steel Industry
looks at ISA to further its critical agenda of sustained growth, both in
steel production and in generating domestic demand.
➢ ISA was formed in 2014 and has 15 members – eight full members and
seven affiliates. The list of full members includes –Steel Authority of India
(SAIL) and Rashtriya Ispat Nigam Ltd (RINL) – while heavyweights from
the private sector include JSW Steel Ltd, Tata Steel Ltd, Jindal Steel and
Power Ltd, Essar Steel India Ltd, Bhushan Power and Steel Ltd and Tata
Steel BSL Ltd. ISA, an affiliate member of World Steel Association (WSA),
regularly collaborates with WSA on the organisation of events, as well as
taking part in other key meetings with global partners.
27
Our eight Full Members are:
• Tata Steel Ltd
• Steel Authority of India Ltd.
• JSW Steel Ltd.
• Rashtriya Ispat Nigam Ltd.
• Essar Steel Ltd.
• Jindal Steel & Power Ltd.
• Tata Steel BSL Ltd.
• Bhushan Power & Steel Ltd.
Our Seven Affiliate Members are Monnet
Ispat & Energy Ltd., INSDAG (Institute
for Steel Development and Growth),
KISMA (Karnataka Iron and Steel
Manufacturer’s Association), Arjas Steel,
Visa Steel, Electrosteel Steels and Orissa
Metalliks Pvt. Ltd
Members of Indian Steel Association
28
Vision and Objectives of ISA
➢Vision of ISA-
To work towards transforming the Indian Steel Industry as a
global leader acclaimed for its Quality, Productivity and
Competitiveness, with a focus on health, safety and
environment, along with a growing thrust on innovation through
R&D, adopting an inclusive and collective approach.
➢ Objectives of ISA-
▪ Promoting steel by raising awareness about the numerous
advantages of good quality steel
▪ Collaborating with international steel organizations to
tackle issues of mutual interest.
▪Working with the government on matters affecting the
steel industry.
29
Important Ministries/Department/Organization
Ministry of Steel
Name of the person Designation Contact Details
Shri Binoy Kumar Secretary [email protected]
Shri Saraswati Prasad Special Secretary & Financial Adviser [email protected]
Smt. Rasika Chaube Additional Secretary [email protected]
Smt. Ruchika Chaudhry Govil Joint Secretary [email protected]
Shri Puneet kansal Joint Secretary [email protected]
Ministry of Mines
Name of the person Designation Contact Details
Shri Anil Gopishankar Mukim Secretary [email protected]
Dr. K. Rajeswara Rao Additional secretary [email protected]
Ministry of Commerce
Name of the person Designation Contact Details
Shri Anup Wadhawan Secretary [email protected]
Shri Shudhanshu Pandey Additional Secretary [email protected]
Shri Alok Vardhan Chaturvedi DGFT [email protected]
Dr. K.C.Rout Additional Secretary-DGFT [email protected]
Ministry of Environment, Forest and Climate Change
Name of the person Designation Contact Details
Shri C K Mishra Secretary [email protected]
Control Pollution Central Board
Name of the person Designation Contact Details
Shri S.P. Singh Parihar Chairman [email protected]
Dr. Prashant Gargava Member Secretary [email protected]
Ministry of FinanceName of the person Designation Contact Details
Shri Rajiv Kumar Joint Secretary [email protected]
30
Contact Us for data related issues
Address:207-208, 2nd Floor
Kailash Building
New Delhi -110-001
India
Tel: +011 4266 8811
Fax: +011 4266 8805
E-mail: [email protected]
Website: http://indsteel.org/31
THANK YOU
DISCLAIMER
The material in this presentation has been prepared by Indian Steel Association (ISA) and is a general background information reviewing the
status of the developments in the global and Indian steel industry as at the date of this presentation. This presentation is strictly for internal use
of all the member companies of ISA, whose names have been stated in the presentation.
Information is given in summary form and does not purport to be complete or all inclusive. The information has been sourced from independent
third party databases, knowledge sources and news reports, and the authenticity of the same has not been independently verified by ISA.
Additionally, any third party forecasts on financial or economic parameters, projections or estimates should not be construed as an investment
advice or a recommendation to any ISA member. Recipients of this presentation from member companies of the ISA should each make their own
evaluation of the contents and adequacy of the information contained in the presentation.
ISA does not undertake any obligation to publicly release any changes to any revisions, modifications or forward looking statements in the
subsequent editions of this bi-monthly presentation. Unless otherwise specified, all information is for the period January 2018 or prior.
32
