A Review of developments in
The Global & Indian Steel Industry
Monthly edition
Issue No. 29
July 2018 (covering June 2018)
Compiled on behalf of Indian Steel Association,
Mr. Anup Kashyap
Strictly for internal circulation
Our eight Full Members are:
• JSW Steel Ltd
• Steel Authority of India Ltd.
• Tata Steel Ltd.
• Rashtriya Ispat Nigam Ltd.
• Essar Steel Ltd.
• Jindal Steel & Power Ltd.
• Bhushan Power & Steel Ltd.
• Bhushan Steel & Strips Ltd.
Our seven Affiliate Members are Monnet
Steel, INSDAG (Institute for Steel
Development and Growth), KISMA
(Karnataka Iron and Steel Manufacturer’s
Association), Gerdau Steel, Visa Steel,
Jindal Stainless & Electrosteel Steels.
About Indian Steel Association
GLOBAL ECONOMIC DEVELOPMENTS
Source: The Economist Intelligence Unit, Global Forecasting Service
Country-wise Growth Forecasts
2018 - 2022
As of June 20th 2018.
The assumptions for forecasts are available on the website of the Economist Intelligence Unit
In % 2018 2019 2020 2021 2022
India
Real GDP Growth 7.3 7.7 7.4 7.6 7.8
Inflation 5.0 5.4 4.7 4.8 5.1
China
Real GDP Growth 6.7 6.4 6.2 5.5 5.3
Inflation 2.2 3.0 2.8 2.3 2.5
U.S.A
Real GDP Growth 2.7 2.5 0.8 1.8 1.8
Inflation 2.4 2.4 1.3 1.8 1.9
Japan
Real GDP Growth 1.4 1.6 0.4 1.2 1.2
Inflation 1.1 1.5 1.7 0.9 1.1
Russia
Real GDP Growth 1.7 1.8 1.6 1.7 1.8
Inflation 3.5 4.3 4.5 4.0 4.1
Source: The Global Economic Outlook, A report by World Bank-June 2018
Global Economic Outlook
June 2018
➢ Global growth has eased, but remains robust, and is projected to reach 3.1 percent in 2018. It is expected to edge
down in the next two years to 2.9 percent by 2020, as global slack dissipates, trade and investment moderate, and
financing conditions tighten.
➢ In advanced economies, activity continues to grow above potential, notwithstanding some recent moderation, while
additional fiscal stimulus measures are expected to provide a further lift to near-term growth in the United States.
➢ Among emerging market and developing economies (EMDEs), the recovery in commodity exporters has continued, as
consumption and investment firm.
➢ Activity in commodity importers continues to be robust. Growth in China is gradually slowing, but remains resilient,
while constraints to growth are dissipating in other large commodity importers— notably India and Mexico, where
investment is recovering. Inflation remains broadly stable so far, despite higher commodity prices and limited
remaining slack.
Global Growth Global Manufacturing output
and export orders
Source: Report by World Economic Forum
Fastest Growing Economies of the world
Report by World Economic Forum
➢ Myanmar is the world’s fastest-growing economy, according to the IMF’s latest World Economic
Outlook.The country’s GDP is projected to grow by 8.6% this year.
➢ The Ivory Coast follows Myanmar in second place, with projected GDP growth of 8.5% this year. Third
on the list is Bhutan, with 8.4%.
➢ Emerging markets are still expected to see strong growth, driven by India with over 7% and China with
more than 6%
8.6%
8.5%
8.4%
7.5%
7.4%
7.2%
7.0%
6.9%
6.6%
6.6%
Myanmar
Ivory Coast
Bhutan
India
Laos
Iraq
Cambodia
Tanzania
Bangladesh
Senegal
Projected percentage of real GDP growth
GLOBAL STEEL DEVELOPMENT
Source: World Steel Association;
Region wise Crude Steel Production
As Per World Steel Association
5
RegionJan – May 2018 in
(MT)
Jan-May 2017 in
(MT)
% Change
EU-28 73.06 71.78 1.8
Other Europe 17.29 16.46 5.1
CIS 42.40 41.26 2.8
N.America 49.46 47.98 3.1
S.America 18.35 17.82 3.0
Africa 5.95 5.57 6.8
Middle East 14.65 12.83 14.0
Asia 505.35 483.16 4.6
Oceania 2.6 2.37 13.4
Source: World Steel Association
Top Crude Steel Producing nations
As Per World Steel Association
According to World Steel Association, world’s top ten nations with regards to cumulative
crude steel output in Jan-May , 2018 is as follows:
Rank Nation Output (in ‘000 tonnes)
1 China 369.85
2 Japan 44.21
3 India 44.12
4 United States 34.84
5 Russia 30.02
6 South Korea 29.94
7 Germany 18.68
8 Turkey 15.85
9 Brazil 14.27
10 Italy 10.66
Source: World Steel Association
Top DRI Producing nations
As Per World Steel Association
According to World Steel Association, world’s top ten nations with regards to Direct
Reduced Iron (DRI) output during Jan-May , 2018 is as follows:
Rank Nation Output (in ‘ 000 tonnes)
1 India 12.36
2 Iran 11.19
3 Mexico 2.44
4 Egypt 2.35
5 Saudi Arabia 1.98
6 UAE 1.42
7 Qatar 0.97
8 Argentina 0.78
9 Canada 0.74
10 South Africa 0.34
Source: World steel Association
70.371.5
72.3
74.5
73.5
74.072.9
72.7
73.972.8
70.9 69.4
72.7 73.5
74.4
76.777.7
World Steel Capacity Utilization in %
➢ World crude steel production for the 64 countries reporting to the World Steel
Association (worldsteel) was 154.9 million tonnes (Mt) in May 2018, a 6.6% increase
compared to May 2017.
➢ The crude steel capacity utilisation ratio of the 64 countries in May 2018 was 77.7%.
This is 4.2 percentage points higher than May 2017. Compared to April 2018, it is 1.0
percentage point higher.
Global Steel production and Capacity Utilisation
Source:Steel Mint Research
Trend in USA Flat Steel Imports
May 2018
➢ According to latest custom data, USA flat
steel imports which includes (7208 HR
Coils,7210,7212 GP/GC and 7225 electrical
sheets) witness decline by 14% to 1.01 MT
in May’18 as compared to 1.17 MT in
Apr’18.
➢ During 5 months of CY 18(Jan-May) nations
flat steel imports summed upto 4.91 MT
higher by 4% as compared to 4.72 MT in
similar time period of previous year.
➢ Canada was the largest flat steel exporter in
May 18 and has exported 0.40 MT higher by
3% against 0.39 MT inApr’18.
➢ Mexico and Vietnam were the second and
third largest exporter of USA flat steel.
Source: Ministry of Economy, trade and Industry(METI),Japan Government Report
Japanese Steel Outlook
➢ Japan’s METI (Ministry of Economy ,Trade and Industry) has recently country’s crude steel
estimates and demand outlook for second quarter (starting from July to September) FY 18.
➢ According to the forecast ,country’s crude steel production in Q2 FY 18 is estimated to be
around 26 MT ,an increase of 2 to 3% compared to corresponding quarter pf last fiscal. If
quarterly comparison is done ,the same is likely to record a rise of about 1% in upcoming
Q2 quarter of FY 18.
➢ The surge in Japan’s crude steel production forecast reflects Japan’s strong domestic and
overseas demand.
Japan’s
Quarterly
crude
steel
output
forecast
DOMESTIC STEEL DEVELOPMENTS
Source: Joint Plant Committee, MT-Million tonnes
Status of India’s Steel Trade
April-June
2018
% Change over
,2016-17%
Qty in MT %
Production for Sale(Crude Steel) 26.08 6 %
Import 1.89 11%
Export 1.35 -33.67%
➢ According to Joint Plant Committee(Govt. of India),India’s Crude has increased by 6% Y-o-Y to
26.08 MT in Q1 FY19.India reported 8.628 MT crude steel output in June 18 over June 17.
➢ India has exported 0.364 MT of finished steel in Jun’18,down by 15% on monthly basis against 0.43
MT in May 18.However on Yearly basis the same decline by 44% over June 17
➢ Indian finished steel import stood 0.676 MT in June 18 up by 9.4% against 0.62 MT in May 18.Also
on yearly basis the same moved up by 5 % in June 18 over June 17.
➢ India’s finished steel consumption fell marginally by 3% M-o-M to 8.097 MT in Jun 18 as compared
to May 18.Also on yearly basis the same went up 8.3% in June 18 over June 17.India’s consumption
of total finished steel saw a growth of 8.4% in April –June 2018.
Source:Coal Mint Research
Trend in Monthly coking coal review
June 18
Source: Steel Mint
Trend in coking coal imports
June 18
➢ In Jun’18,Indian coking coal imports stood at around at 4.23 Mt ,according to the vessel
line up data by Coal Mint Research.
➢ On Year-on-Year comparison , Jun 18 imports were almost at par with the imports of
around 4.20 MT in Jun’17.
➢ Indian coking coal from Australia constituted the highest share at around 73% followed by
from Canada at around 10%.
Coking coal imports in India Country wise Coking coal imports in India
Source:Steel Mint, Custom Data
Trend in Iron Ore-Export and Import
Q1 FY 19
➢ Indian Iron Ore exports have recorded sharp decline in Q1 FY 19.The exports witnessed
at 2.31 MT down, Q-o-Q as against Q4 FY 18 at 5.87 MT. On yearly basis, the exports
have depicted fall of 56 % as against 5.21 MT in Q1 FY 18.
➢ Indian Iron ore exports in June 18 witnessed at 0.34 Mt, down 58% M-o-M as against 0.79
MT in May ‘18.The exports have dropped to lowest since June’17 at 0.25 MT.
➢ Indian Iron Ore Imports in first quarter FY’19 recorded at 3.48 MT according to Steel
mint data. On yearly basis imports have increased by four folds as against 0.73 Mt Q1FY
18.However witnessed a decline 22% Q-o-Q against 4.49 MT in Q4 FY 18.
Source: Steel Mint
Domestic Steel Price highlights
July 2018
➢ Currently trade reference prices for HRC (IS2062),2.5-8 mm is around INR 45,000 per
ton(ex- Mumbai), INR 45,300 per ton (ex- Delhi) and INR 45,500 per ton(ex-
Chennai).The prices mentioned are basic on cash payment excluding GST @18%.
➢ Currently trade reference price for CRC (IS 513) 0.9 mm is hovering in the range of INR
49,500-50,000 per ton (ex- Delhi) and INR 51,000 per ton (ex Chennai).The prices
mentioned above are basic on cash excluding GST @18%
INDIAN ECONOMIC DEVELOPMENT
Source: Report by World Bank
Indian Economy Growth
World Bank Report
➢ India emerged as the world’s sixth largest economy in 2017 surpassing France and is likely to go past
the United Kingdom, which is at the fifth position, according to an analysis of data compiled by the
World Bank.
➢ Indian government has taken various reform measures to improve the ease of doing business in recent
years. These include implementation of the Goods and Services Tax and the Insolvency and Bankruptcy
Code.
➢ As per the IMF World Economic Outlook released in April this year, the size of the Indian economy
was pegged at $2.61 trillion, ahead of France with a GDP of $2.58 trillion. The country's economy
grew at a seven-quarter high of 7.7 percent in the three months ended March 2018, helped by higher
government spending and investment.
19.4
12.2
3.67
3.67
2.62
2.59
2.58
USA
China
Japan
Germany
U.K.
India
France
Top seven largest Economies GDP ($ Trillion)
Source: Reserve Bank of India
Rates at Reserve Bank of India
July 2018
CRR – Cash Reserve Ratio; SLR - Statutory Liquidity Ratio, MCLR-Marginal Cost of fund lending rates
CurrencyDate
9th July 2018
I USD 68.65
1 EUR 80.78
1 GBP 91.46
100 YEN 62.16
Policy Repo Rate : 6.25 %
Reverse Repo Rate : 6.00 %
Marginal Standing Facility Rate : 6.50 %
Bank Rate : 6.50 %
Reference Rates
Policy Rates Reserve Ratios
CRR : 4 %
SLR : 19.5 %
Lending/ Deposit Rates
Base Rate : 8.70-9.45%
Savings Deposit Rate : 3.50-4.00%
MCLR (Overnight) : 7.80-8.05%
Term Deposit Rate > 1 year : 6.25-7.00%
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 2018 or prior.
