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8/3/2019 stainless steel flange
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Secondary data
GLOBAL steel PERSPECTIVE
In the past few years the stainless steel industry has witnessed some tremendous
changes in the international steel market. Steel products are enjoying growth in
structural demand which is a result of the development of application technology
and fall in prices, both of these factors has diverted many consumers to stainless
steel application (Wikes and Woodley, 1998). Growing consumer superiority
influenced industries like oil and gas, construction and other capital demanding
industries and these sectors witnessed a major growth in demands. Thus, leading to a
further increase of 9% in world steel usage in 2006. Hence, making the industry more
challenging and dynamic in nature. (International iron and steel institute, 2006). As
Nickel is the most important ingredient in the stainless steel products. Nickel, being
the only component which is traded on the commodity market makes it more
impeccable in nature for the steel products and dominant on the global steel prices.
Ever increasing globalisation has been prominently acting upon the commodities
market, it did emphasize its important on some the very unpopular metals like nickel,
and commoditization on nickel increased in the mid 21 st century and did impact in the
upward movement of the steel prices globally. This movement in the prices had a big
impact on some of the global products grade like 304, 316 and 316L, which accounts
for 65% of the total steel consumption in the stainless steel industry. This price
movements in the commodity market (especially on Nickel) has resulted in significant
decrease in prices in stainless steel products, hence turning this market to be more
transparent and enabling product differentiation to become a bit more difficult than
ever (Wikes and Woodley, 1998). Commoditization also allowed reorganizing the
production process in order to gain competitive advantage. The unwanted effect of the
volatile Nickel prices on the stainless steel industry is minimized due to the low
content of the nickel in these grades. Still the increasing global consolidation(steel
manufacturer in the same country venturing together) and continues rising cost of raw
material forced all manufactures to pursue cost leadership by simplifying and
evaluating the process and scale, or by adapting niche business structure in specialist
steel.
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This increasing competition is forcing a large number of manufacturers to optimize
their operations to stay on edge. In order to become competitive, companies are now
seeking to analyse and concentrate on both internal as well as external challenges
which are created by the revolution that took place in stainless steel industry.
According to IISI, some companies have been selling their products way below the
actual market price just to survive and sustain the competition.
Steel Industry- The Indian Scenario
India is the seventh largest producer of steel in the world, looking closely at the world
market figures Indian steel industry has 2% of the market share at the international
level. Having a closer look at the root level of the steel industry in India, the industry
can be categorized into two categories: The first category comprises of the
internationally recognized firms which includes Tata Group, Steel Authority of India
(better known as SAIL) and Rashtriya Ispat Nigam Limited (RINL). The firms in the
first category have a capacity ranging 4mt- 5mt. These firms have now established
themselves in the international markets and have been entering into Mergers and
Acquisition. The secondary group consists of all the firms which have a production
capacity of less than first group, it includes companies like Jindal Group, Ispat and
Essar and all small and medium sized enterprises which has the production capacity
between 3Mt to 4Mt. The industries in the above categories contribute about 70% of
the market share of the Indian Steel Industry.
The mark of the growth of Indian Steel industry can be traced back from 1992-93, the
growth of the Indian steel industry was marked at 22% high influenced by the
economic reforms. The following year also witnessed a respectable amount of growth
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recorded at 14%. But with the development in the other industries the following few
years were not so good for the industry with not really much development and the
investors getting off to other industries. The real growth in the Indian steel industry
was seen after the liberalization of the Indian steel industry, but still the problems of
low productivity were surrounding the industry. The graph below shows the
consumption and productivity trends from financial year 2000-01 to 2005-06 which
evidently shows that the performance of Indian Steel Industry have constantly
improved since liberalization.
Finished steel Production and Consumption
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005
MetricTo
nnes
consprod
Source: JPC/Internal
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Analysis of Indian Steel Industry
Reference
http://www.worldsteel.org/?action=storypages&id=213
Steel Industry- The Indian Scenario
India is the tenth largest producer of steel in the world, looking closely at the world
market figures Indian steel industry has 2% of the market share at the international
level. Having a closer look at the root level of the steel industry in India, the industry
can be categorized into three categories: In the first category falls the internationally
recognized firms which include Tata Group, Steel Authority of India (better known as
SAIL) and Rashtriya Ispat Nigam Limited (RINL). The firms in the first category
have a capacity ranging 4mt- 5mt. The firms like Jindal Group, Ispat and Essar group
falls in the second category of steel producers in India as their capacity ranges
between 3Mt- 4Mt. The industries in the above categories share the 70% of the
market share of the Indian Steel Industry. The third category includes the small scale
industries with very low capacity.
http://www.worldsteel.org/?action=storypages&id=213http://www.worldsteel.org/?action=storypages&id=2138/3/2019 stainless steel flange
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The mark of the growth of Indian Steel industry can be traced back to 1992-93, the
Indian growth of the industry was marked 22% influenced by the economic reforms.
The following year also witnessed a respectable amount of growth recorded at 14%.
But with the development in the other industries the following few years were not so
good for the industry with not really much development and the investors getting off
to other industries. The real growth in the Indian steel industry was seen after the
liberalization of the Indian steel industry, but still the problems of low productivity
were surrounding the industry. The graph below shows the consumption and
productivity trends from financial year 2000-01 to 2005-06 which evidently shows
that the performance of Indian Steel Industry have constantly improved since
liberalization.
Finished steel Production and Consumption
0
5
10
15
20
25
30
35
40
2000 2001 2002 2003 2004 2005
M
etricTonnes
cons
prod
Source: JPC/Internal
Analysis of Indian Steel Industry