Summer Training Project Report

ON
“INTERNATIONAL TRADE OF HOT-ROLLED COILS”
UNDERTAKEN AT

MAHARATNA

INTERNATIONAL TRADE DIVISION

STEEL AUTHORITY OF INDIA LIMITED
NEW DELHI

For The Partial Fulfillment of The Post-Graduate Degree

MASTER OF INTERNATIONAL BUSINESS
2008-2010

JAMIA MILLIA ISLAMIA

NEW DELHI

Submitted By:
MOHAMMAD AREEB IMAM
Roll No: MIB08- 28
Under the Guidance of:
Dr. Ravindar Kumar
Department of Commerce & Business Studies

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2
 Acknowledgements

All praise be to Allah whose divine support kept me in the right direction while working on this
summer training project.

Gratitude and indebtedness are due to so many people without whom the successful completion
of the project would not have been possible.

I express my sincere gratitude to Mr. Vinod Kumar Singhal, AGM, Marketing-ITD, SAIL, New
Delhi, my industry supervisor, for his constant and valuable guidance which not only helped me
in completing this project but also enabled me to understand the complex issues related with
international trade.

I am very grateful to my faculty supervisor Dr. Ravindar Kumar, for his guidance and
encouragement which helped me in successfully completing this project.

I am also thankful to Mr. Abdul Kalam, Former Advisor, SAIL and Prof. Rihan Khan Suri,
Training & Placement Officer, Jamia Millia Islamia, for their valuable support and guidance
which have been crucial to the completion of this report.

In the end, I would like to thank all the staff members of International Trade Division, SAIL, my
parents & friends who have helped me during my summer internship.

MOHAMMAD AREEB IMAM

MIB, 2008-2010
Roll no. 28

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 CERTIFICATE

This is to certify that Mr. Mohammad Areeb Imam, a student of

Masters of International business, Jamia Millia Islamia has worked in
International Trade Division, Steel Authority of India Ltd, under the able
guidance & supervision of Mr.Vinod Kumar Singhal, AGM (Marketing
ITD), SAIL, New Delhi.

The period for which he was on training was from July 20, 2009 to
September 12, 2009.The summer internship report has the requisite
standard for the partial fulfillment of the Post Graduate Degree of
Master of International Business.

To the best of our knowledge no part of this report has been submitted
for the award of any other degree and content are based on secondary
data.

FACULTY GUIDE Mohammad Areeb Imam

Dr. Ravindar Kumar MIB, 2008-2010
Deptt of Commerce Roll No. 28
&
Business Studies,
Jamia Millia Islamia
New Delhi

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 CONTENT

1) EXECUTIVE SUMMERY
2) RESEARCH METHODOLOGY
3) CHAPTER ONE
• EXPORT PROCEDURE
• DILIVERY TERMS
• PAYMENT TERMS
4) CHAPTER TWO
• AN INTRODUCTION OF STEEL
• STEEL MAKING PROCESS
• USES
• TYPES
• DUTY STRUCTURE 2009-10
5) CHAPTER THREE
• WORLD ECONOMY A GLANCE
• WORLD STEEL INDUSTRY
• TOP PRODUCERS OF STEEL
• ARCELOR MITTAL
• POSCO
• NIPPON
• BAOSTEEL
6) CHAPTER FOUR
• THE INDIAN ECONOMY (AN OVERVIEW)
• INDIAN STEEL INDUSTRY
• MAJOR PSUs AND PRIVATE SECTOR COMPANIES
7) CHAPTER FIVE
• STEEL AUTHORITY OF INDIA LTD.
• MAJOR PLANTS & THEIR PRODUCTION
• CORPORATE POLICIES
• PRODUCT TYPE
• FINANCIAL PERFORMANCE
• CENTRAL UNITS
• INTERNATIONAL TRADE DIVISION
• PRODUCTION & EXPORT TO VARIOUS COUNTRIES
• INTERNATIONAL TRADE OF HOT-ROLLED COILS
• WORLDWIDE PRODUCTION AND CONSUMPTION
• APPLICATION OF HR COILS
• FINDINGS
• RECOMENDATIONS
• CONCLUSION
• BIBLIOGRAPHY

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 EXECUTIVE SUMMARY

In the five years before the start of the global financial crisis, the steel industry
worldwide enjoyed a boom in demand. This enabled steel companies to achieve a
level of profitability that funded new investments, acquisitions and continued
consolidation within the industry.
This virtuous circle of growing output and beneficial investment came to a halt
when steel demand collapsed in the third quarter of 2008.
The pace of change was breathtaking. By the first quarter of 2009, many countries
had officially entered recession.
Steel, a global industry, now saw the negative side of globalisation. Demand
crashed worldwide. Large economies such as Germany and Japan were for a time
just as badly hit as other regions, because of the impact on key steel-using
customers as markets for their goods disappeared.
As a result, apparent steel use – which had enjoyed over 7% growth before the
crisis – collapsed in the fourth quarter of 2008. Apparent steel use in 2008 was
1.8% down on 2007.
The crisis has underlined the ever-increasing importance of emerging economies
even more, due to their relative resilience. In late 2008 and 2009, China and India
continued to register growth in industrial production. In the developed world, steel
use was down by 30%.Asia continues to surge ahead.
India’s economic growth is contingent upon the growth of the Indian steel
industry. Consumption of steel is taken to be an indicator of economic
development. While steel continues to have a stronghold in traditional sectors such
as construction, housing and ground transportation, special steels are increasingly
used in engineering industries such as power generation, petrochemicals and
fertilisers.

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India occupies a central position on the global steel map, with the establishment of
new state-of-the-art steel mills, acquisition of global scale capacities by players,
continuous modernisation and upgradation of older plants, improving energy
efficiency and backward integration into global raw material sources. In spite of
the recent global financial meltdown long-term prospect for the Indian steel market
is strong. The speed of growth might have slowed down but the industry will
continue to grow in different ways.

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 RESEARCH METHODOLOGY

PRIMARY OBJECTIVES

1. To acquire and utilize the knowledge on trade & customs of

international steel industry.

2. To understand the policies and the role played by SAIL in the

domestic and international steel industry.

3. To get a better understanding of the product and its types.

4. To understand the domestic & world steel market.

5. To get knowledge about the major players of world steel

industry & impact of recession on it.

6. To get an overview of Hot-Rolled Coils in international

market, its production, consumption and application.

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 PROBLEM DEFINATION

International trade is in principle not different from domestic trade as the

motivation and the behavior of both the parties involved in a trade does
not change fundamentally depending on whether trade is across border
or not.

The main different is that international trade is typically more costly

than domestic trade.

The reason is that a border typically imposes additional cost such as

tariffs, customs, trade policies, time cost due to border delays and cost
associated with country differences such as language and a different
culture.

Therefore the challenge for the organization is:-

• To expand its business to its existing export destinations at quality
products at competitive prices.
• To find out ways of increasing foreign demand of India steel.
• To establish business relations mergers & joint ventures with other
foreign steel makers.

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 RESEARCH DESIGN

This Research is an Exploratory Research, carried on by collecting the

secondary data. Exploratory Research is used principally to gain deeper
understanding of something.
The focus of Exploratory Research is on gaining insights and familiarity
for later investigations. Exploratory Research is the act of searching or
traveling for the purpose of discovery.

The sources used for collecting data are:-

• Government organizations like MoS, EEPC, ITPO, & MoC.
• International Organisations like, UNCTAD, IMF, ITC
• Case studies and literature reviews
• Journals and books
• Newspaper and Magazines
• Published censuses of other statistical data
• Internet articles
• Published statistics from various organizations
• Annual reports
My Exploratory research is focused in various areas of steel, its
production, consumption and major players both in international and
domestic steel market. HR Coil uses and total world dynamics.

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 LIMITATIONS

1. This is not an exhaustive study of the Indian steel industry.

2. Lack of availability of data.

3. Excess work load on the industry supervisor.

4. No financial support from the company.

5. Duration of the study.

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EXPORT-IMPORT PROCEDURE

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• Seller and Buyer conclude a sales contract, with method of payment usually by letter of
credit (documentary credit).
• Buyer applies to his issuing bank, usually in Buyer's country, for letter of credit in favor
of Seller (beneficiary).
• Issuing bank requests another bank, usually a correspondent bank in Seller's country, to
advice, and usually to confirm, the credit.
• Advising bank, usually in Seller's country, forwards letter of credit to Seller informing
about the terms and conditions of credit.
• If credit terms and conditions conform to sales contract, Seller prepares goods and
documentation, and arranges delivery of goods to carrier.
• Seller presents documents evidencing the shipment and draft (bill of exchange) to paying,
accepting or negotiating bank named in the credit (the advising bank usually), or any
bank willing to negotiate under the terms of credit.
• Bank examines the documents and draft for compliance with credit terms. If complied
with, bank will pay, accept or negotiate.
• Bank, if other than the issuing bank, sends the documents and draft to the issuing bank.
• Bank examines the documents and draft for compliance with credit terms. If complied
with, Seller's draft is honored.
• Documents release to Buyer after payment or on other terms agreed between the bank
and Buyer.
• Buyer surrenders bill of lading to carrier (in case of ocean freight) in exchange for the
goods or the delivery order.

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 DELIVERY TERMS

EXW – Ex Works (named place):

The seller makes the goods available at his premises. The buyer is responsible for all charges.
This term may be the easiest to administer, however may not be in the seller's best interests.
There is no control over the final destination of the goods

FOB – Free on board (named loading port)

The seller must load the goods on board the ship nominated by the buyer, cost and risk being
divided at ship's rail. The seller must clear the goods for export. Maritime transport only. It also
includes Air transport when the seller is not able to export the goods on the schedule time
mentioned in the letter of credit. In this case the seller allows a deduction of sum equivalent to
the carriage by ship from the air carriage.

FCA – Free Carrier (named place)

The seller hands over the goods, cleared for export, into the custody of the first carrier (named by
the buyer) at the named place. This term is suitable for all modes of transport, including carriage
by air, rail, road, and containerized / multi-modal transport.

FAS – Free Alongside Ship (named loading port)

The seller must place the goods alongside the ship at the named port. The seller must clear the
goods for export; this changed in the 2000 version of the Incoterms. It is Suitable for maritime
transport only.

CFR – Cost and Freight (named destination port)

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Seller must pay the costs and freight to bring the goods to the port of destination. However, risk
is transferred to the buyer once the goods have crossed the ship's rail. For Maritime transport
only.
CIF – Cost, Insurance and Freight (named destination port)
Exactly the same as CFR except that the seller must in addition procure and pay for insurance for
the buyer. For Maritime transport only.

CPT – Carriage Paid To (named place of destination)

The general/containerized/multimodal equivalent of CFR. The seller pays for carriage to the
named point of destination, but risk passes when the goods are handed over to the first carrier.

CIP – Carriage and Insurance Paid (To) (named place of destination)

The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance
to the named destination point, but risk passes when the goods are handed over to the first
carrier.

DAF – Delivered At Frontier (named place)

This term can be used when the goods are transported by rail and road. The seller pays for
transportation to the named place of delivery at the frontier. The buyer arranges for customs
clearance and pays for transportation from the frontier to his factory. The passing of risk occurs
at the frontier.

DES – Delivered Ex Ship (named port)

Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at
the named port of destination and the goods made available for unloading to the buyer. The seller
pays the same freight and insurance costs as he would under a CIF arrangement.

DDU – Delivered Duty Unpaid (named destination place)

This term means that the seller delivers the goods to the buyer to the named place of destination
in the contract of sale. The goods are not cleared for import or unloaded from any form of

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transport at the place of destination. The buyer is responsible for the costs and risks for the
unloading, duty and any subsequent delivery beyond the place of destination

DDP – Delivered Duty Paid (named destination place)

This term means that the seller pays for all transportation costs and bears all risk until the goods
have been delivered and pays the duty.

Methods of Payment in International Trade

To succeed in today’s global marketplace and win sales against foreign competitors, exporters
must offer their customers attractive sales terms supported by appropriate payment methods.
Because getting paid in full and on time is the ultimate goal for each export sale, an appropriate
payment method must be chosen carefully to minimize the payment risk while also
accommodating the needs of the buyer.

Key Points

• In international trade exporters want to receive payment as soon as possible, preferably

as soon as an order is placed or before the goods are sent to the importer.
• For importers, any payment is a donation until the goods are received.
• Therefore, importers want to receive the goods as soon as possible but try to delay
payment as long as possible, preferably until after the goods are resold to generate
enough income to pay the exporter.

Some of the methods of payment used in international trade are discussed below:

Cash-in-Advance
With cash-in-advance payment terms, the exporter can avoid credit risk because payment is
received before the ownership of the goods is transferred. Wire transfers and credit cards are the
most commonly used cash-in-advance options available to exporters. However, requiring
payment in advance is the least attractive option for the buyer, because it creates cash-flow

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problems. Foreign buyers are also concerned that the goods may not be sent if payment is made
in advance. Thus, exporters who insist on this payment method as their sole manner of doing
business may lose to competitors who offer more attractive payment terms.

Letters of Credit
Letters of credit (LCs) are one of the most secure instruments available to international traders.
An LC is a commitment by a bank on behalf of the buyer that payment will be made to the
exporter, provided that the terms and conditions stated in the LC have been met, as verified
through the presentation of all required documents. The buyer pays his or her bank to render this
service. An LC is useful when reliable credit information about a foreign buyer is difficult to
obtain, but the exporter is satisfied with the creditworthiness of the buyer’s foreign bank. An LC
also protects the buyer because no payment obligation arises until the goods have been shipped
or delivered as promised.

Documentary Collections
A documentary collection (D/C) is a transaction whereby the exporter entrusts the collection of a
payment to the remitting bank (exporter’s bank), which sends documents to a collecting bank
(importer’s bank), along with instructions for payment. Funds are received from the importer and
remitted to the exporter through the banks involved in the collection in exchange for those
documents. D/Cs involve using a draft that requires the importer to pay the face amount either at
sight (document against payment) or on a specified date (document against acceptance). The
draft gives instructions that specify the documents required for the transfer of title to the goods.
Although banks do act as facilitators for their clients, D/Cs offer no verification process and
limited recourse in the event of non-payment. Drafts are generally less expensive than LCs.

Open Account
An open account transaction is a sale where the goods are shipped and delivered before payment
is due, which is usually in 30 to 90 days. Obviously, this option is the most advantageous option
to the importer in terms of cash flow and cost, but it is consequently the highest risk option for an
exporter. Because of intense competition in export markets, foreign buyers often press exporters
for open account terms since the extension of credit by the seller to the buyer is more common
abroad. Therefore, exporters who are reluctant to extend credit may lose a sale to their

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competitors. However, the exporter can offer competitive open account terms while substantially
mitigating the risk of non-payment by using of one or more of the appropriate trade finance
techniques, such as export credit insurance.

EXPORT DOCUMENTS
The documents that are commonly used in exporting are discussed below, but specific
requirements vary by destination and product. It is divided in the following sections: common
export-related documents, certificates of origin, other certificates for shipments of specific
goods, Export licenses and Temporary shipment documents..

• Common Export Documents

• Certificates of Origin
• Other Certificates for Shipments of Specific Goods
• Export Licenses
• Other Export Related Documents
• Temporary Shipments

COMMON EXPORT DOCUMENTS

Airway Bill
Air freight shipments require Airway bills, which can never be made in negotiable form. Airway
bills are shipper-specific (i.e. Fed-Ex, UPS, DHL, etc).

Bill of Lading
A contract between the owner of the goods and the carrier (as with domestic shipments). For
vessels, there are two types: a straight bill of lading, which is non-negotiable, and a negotiable or
shipper's order bill of lading. The latter can be bought, sold, or traded while
the goods are in transit. The customer usually needs an original as proof of ownership to take
possession of the goods

Commercial Invoice

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A bill for the goods from the seller to the buyer. These invoices are often used by governments to
determine the true value of goods when assessing customs duties. Governments that use the
commercial invoice to control imports will often specify its form, content, and number of copies,
language to be used, and other characteristics.

Export Packing List

Considerably more detailed and informative than a standard domestic packing list, it lists seller,
buyer, shipper, invoice number, date of shipment, mode of transport, carrier, and itemizes
quantity, description, the type of package, such as a box, crate, drum, or carton, the quantity of
packages, total net and gross weight (in kilograms), package marks, and dimensions, if
appropriate. Both commercial stationers and freight forwarders carry packing list forms. A
packing list may serve as conforming document. It is not a substitute for a commercial invoice.

Electronic Export Information Form (Shippers Export Declaration)

The EEI is the most common of all export documents. Required for shipments above $2,500*
and for shipments of any value requiring an export license. SED has to be electronically filed via
AES Direct (free service from Census and Customs) online system.
*Note: EEI is required for shipments to Puerto Rico, the U.S. Virgin Islands and the former
Pacific Trust Territories even though they are not considered exports (unless each “Schedule B”
item in the shipment is under $2,500).
Shipments to Canada do not require an SED except in cases where an export license is required.
(Shipments to third countries passing through Canada do need an SED.)

CERTIFICATES OF ORGIN

Generic Certificate of Origin

The Certificate of Origin (CO) is required by some countries for all or only certain products. In
many cases, a statement of origin printed on company letterhead will suffice (download generic
certificate or see sample with explanation). The exporter should verify whether a CO is required
with the buyer and/or an experienced shipper/freight forwarder or the Trade Information center.

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Note: Some countries (i.e. Middle East) require that certificate of origin be notarized, certified by
local chamber of commerce and legalized by the commercial section of the consulate of the
destination country.

For textile products, an importing country may require a certificate of origin issued by the
manufacturer. The number of required copies and language may vary from country to country.

Certificate of Origin for claiming benefits under Free Trade Agreements

Special certificates may be required for countries with which the United States has free trade
agreements (FTAs). Some certificate of origin including those required by the North American
Free Trade Agreement (NAFTA), and the FTA’s with Israel and Jordan, are prepared by the
exporter. Others including those required by the FTA’s with Australia, CAFTA countries, Chile
and Morocco, are importer’s responsibility).

OTHER CERTIFICATES FOR SHIPMENTS OF SPECIFIC GOODS

ATA CARNET/Temporary shipment certificate

An ATA Carnet a. k. a. "Merchandise Passport" is a document that facilitates the temporary
importation of products into foreign countries by eliminating tariffs and value-added taxes
(VAT) or the posting of a security deposit normally required at the time of importation. Apply
for an ATA Carnet.

Certificate of Analysis:
A certificate of analysis is required for seeds, grain, health foods, dietary supplements, fruits and
vegetables, and pharmaceutical products.

Certificate of Free Sale

Certificate of free sale may be issued for biologics, food, drugs, medical devices and veterinary
medicine. More information is available from the Food and Drug Administration. Health
authorities in some states as well as some trade associations also issue Certificates of Free Sale.

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Dangerous Goods Certificate
Exports submitted for handling by air carriers and air freight forwarders classified as dangerous
goods need to be accompanied by the Shipper’s Declaration for Dangerous Goods (sample)
required by the International Air Transport Association (IATA). The exporter is responsible for
accuracy of the form and ensuring that requirements related to packaging, marking, and other
required information by IATA have been met.

For shipment of dangerous goods it is critical to identify goods by proper name, comply with
packaging and labeling requirements (they vary depending upon type of product shipper and
country shipped to).

Fisheries Certificate
The National Marine Fisheries Service conducts inspections and analyses of fishery commodities
for export.

Fumigation Certificate
The Fumigation Certificate provides evidence of the fumigation of exported goods (esp.
agricultural products, used clothing, etc). This form assists in quarantine clearance of any goods
of plant or animal origin. The seller needs to fumigate commodity at his expense a maximum of
fifteen (15) days prior to loading.

Halal Certificate
Required by most countries in the Middle East, this certificate states that the fresh or frozen meat
or poultry products were slaughtered in accordance with Islamic law. Certification by an
appropriate chamber and legalization by the consulate of the destination country is usually
required.

Health Certificate
For shipment of live animals and animal products (processed foodstuffs, poultry, meat, fish
seafood, dairy products, and eggs and egg products). Note: Some countries require that health
certificates be notarized or certified by a chamber and legalized by a consulate. Health

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certificates are issued by the U.S. Department of Agriculture’s Animal and Plant Health
Inspection Service (APHIS).

Ingredients Certificate
A certificate of ingredients may be requested for food products with labels that are inadequate or
incomplete. The certificate may be issued by the manufacturer and must give a description of the
product, contents and percentage of each ingredient, chemical data, microbiological standards,
storage instructions, shelf life, and date of manufacture. If animal fats are used, the certificate
must state the type of fat used and that the product contains no pork, artificial pork flavor, or
pork fat. All foodstuffs are subject to analysis by Ministry of Health laboratories to establish
their fitness for use.

Inspection Certificate
Weight and Quality certificates should be provided in accordance with governing USDA/GIPSA
regulations for loading at port and loading at source/mill site as appropriate. A certificate of
origin certified by local chamber of commerce at load port and a Phytosanitary certificate issued
by APHIS/USDA and Fumigation certificate are to be provided to buyer. Costs of all inspection,
certificates/ documents at the load port are usually the responsibility of the seller.

Insurance Certificate
Used to assure the consignee that insurance will cover the loss of or damage to the cargo during
transit. These can be obtained from your freight forwarder or publishing house. Note: an airway
bill can serve as an insurance certificate for a shipment by air. Some countries may require
certification or notification.

Phytosanitary Certificate
All shipments of fresh fruits and vegetables, seeds, nuts, flour, rice, grains, lumber, plants, and
plant materials require a federal phytosanitary certificate. The certificate must verify that the
product is free from specified epidemics and/or agricultural diseases. Additional information and
forms are available from Animal and Plant Health Inspection Service (APHIS).

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Radiation Certificate
Some counties including Saudi Arabia may require this certificate for some plant and animal
imports. The certificate is statement that the products are not contaminated by radioactivity.

Steamship or Airline Company Certificate

A declaration attached to a bill of lading or airway bill stating that the shipper will not stop at an
unscheduled port, attesting to the accuracy of the shipping route and providing other shipping
information such as name of vessel/plane, nationality of vessel/plane, owner of vessel/plane,
names of ports of call including port of leading and discharge.

Other (product-specific) certificates

Shaving brushes and articles made of raw hair must be accompanied by a recognized official
certificate showing the consignment to be free from anthrax germs. Used clothing requires a
disinfection certificate. Grain requires a fumigation certificate, and grain and seeds require a
certificate of weight. Many countries in the Middle East require special certificates for imports of
animal fodder additives, livestock, pets, and horses.

Weight certificate
Certificate of weight is a document issued by customs, certifying gross weight of the exported
goods.

EXPORT LICENSES

Export license is a government document that authorizes the export of specific goods in specific
quantities to a particular destination. This document may be required for most or all exports to
some countries or for other countries only under special circumstances. Examples of export
license certificates include those issued by the the Department of Commerce’s Bureau of
Industry and Security (dual use articles), the State Department’s Directorate of Defense Trade
Controls (defense articles), the Nuclear Regulatory Commission (nuclear materials), and the US
Drug Enforcement Administration (controlled substances and precursor chemicals).

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Destination Control Statement
Destination Control Statement (DCS) is required for exports from United States for items on the
Commerce Control List that are outside of EAR99 (products for which no license is required). A
DCS appears on the commercial invoice, ocean bill of lading or Airway bill to notify the carrier
and all foreign parties that the item can be exported only to certain destination

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OTHER EXPORT RELATED DOCUMENTS

Consular Invoice
Required in some countries, it describes the shipment of goods and shows information such as
the consignor, consignee, and value of the shipment. If required, copies are available from the
destination country's Embassy or Consulate in the U.S.

Canadian Customs Invoice

This customs invoice is issued in Canadian dollars for dutiable and taxable exports exceeding
$1600 Canadian dollars. Detailed invoice requirements can be obtained at the Canadian Customs
website

Dock Receipt and Warehouse Receipt

It is used to transfer accountability when the export item is moved by the domestic carrier to the
port of embarkation and left with the ship line for export.

Import License
Import licenses are the responsibility of the importer and vary depending upon destination and
product. However, including a copy of an import license with the rest of your documentation
may in some cases help avoid problems with customs in the destination country.

ISPM 15 (Wood Packaging) Marking

The International Standards for Phytosanitary Measures Guidelines for Regulating Wood
Packaging Material in International Trade (ISPM15) is one of several International Standards for
Phytosanitary Measures adopted by the International Plant Protection Convention (IPPC). The
IPPC is an international treaty to secure action to prevent the spread and introduction of pests of
plants and plant products, and to promote appropriate measures for their control. The American
Lumber Standard Committee (ALSC) and the National Wooden Pallet and Container
Association (NWPCA) provide phytosanitary certification for wood packaging materials

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(WPM). APHIS will issue a phytosanitary certificate for wood package materials only if the
WPM is the cargo.
Pre-shipment Inspections
The governments of a number of countries have contracted with international inspection
companies to verify the quantity, quality, and price of shipments imported into their countries.
The purpose of such inspections is to ensure that the price charged by the exporter reflects the
true value of the goods, to prevent substandard goods from entering the country, and to deflect
attempts to avoid payment of customs duties. Requirements for pre-shipment inspection are
normally spelled out in letter-of-credit or other documentary requirements. Inspections
companies include Bureau Veritas, SGS and Intertek. Some countries require pre-shipment
inspection certificates for shipments of used merchandise.

Shippers Letter of Instruction

Issued by the carrier or the forwarder includes shipping instructions for air or ocean shipment.

TEMPORARY SHIPMENTS

ATA CARNET/Temporary shipment certificate

An ATA Carnet a. k. a. "Merchandise Passport" is a document that facilitates the temporary
importation of products into foreign countries by eliminating tariffs and value-added taxes
(VAT) or the posting of a security deposit normally required at the time of importation. Apply
for an ATA Carnet.

Customs Certificate of Registration

Customs Form 4455 may be used (often in conjunction with temporary import bond or ATA
Carnet for goods that are leaving the United States on temporary basis for alteration, repair,
replacement, and processing.

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STEEL PRODUCTION PROCESS

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 STEEL
Steel is an iron based mixture containing two or more metallic and/or non metallic elements
usually dissolving into each other when molten. It is an alloy consisting mostly of iron, with
carbon content between 0.2% and 2.1% by weight, depending on the grade. Since it is an iron
based alloy—as per its end use requirements—other than iron it may contain one or more other
elements such as carbon, manganese, silicon, nickel, lead, copper, chromium, etc. Carbon is the
most cost-effective alloying material for iron.

Steel classes
• Carbon steel (≤2.1% carbon; low alloy)

• Crucible steel

• Alloy steel (contains non-carbon elements)

• Maraging steel (contains nickel)

• Stainless steel (contains chromium)

• Tool steel (alloy steel for tools)

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 STEEL PRODUCTION PROCESSES
Steel production
When iron is smelted from its ore by commercial processes, it contains more carbon than is
desirable. To become steel, it must be melted and reprocessed to reduce the carbon to the correct
amount, at which point other elements can be added. This liquid is then continuously cast into
long slabs or cast into ingots. The ingots are then heated in a soaking pit and hot rolled into slabs,
blooms, or billets.

• Slabs are hot or cold rolled into sheet metal or plates.

• Billets are hot or cold rolled into bars, rods, and wire.

• Blooms are hot or cold rolled into structural steel, such as I-beams and rails.

In modern foundries these processes often occur in one assembly line, with ore coming in and
finished steel coming out Sometimes after a steel's final rolling it is heat treated for strength,
however this is relatively rare.

The following are the various production processes and the underlying technology.

Blast furnace/basic oxygen furnace (BF/BOF): BF basically converts iron ore into liquid form
of iron. Iron produced by BF contains high amount of carbon and other impurities, this iron is
called pig iron. Pig iron due to its high carbon content has limited end use application such as
covers of manholes. To make steel products out of pig iron it is further processed into BOF
where its carbon content and other impurities are burnt or removed through slag separation. Main
inputs to BF are iron ore and coal/coke. BOF is also called oxygen furnace because oxygen is the
only fuel used in the process. Generally, integrated milling use BF/BOF routes to produce
finished steel. Producers that use this technology include SAIL, RINL, TSL and JSWL.

Electric Arc Furnace (EAF): Basic purpose of the EAF is remelting sponge iron, melting scrap,
its main inputs, to produce finished steel. It uses electricity as much as 400-500 kWh/ton.
ISPAT, ESSAR, and the Jindal group are examples of producers, which use this technology.

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COREX or Cipcor Process: COREX is an advance process of making steel. Though few use
this process, it is possible to use non-coking coal directly in smelting work and it also makes it
possible to use lump ore and pellets as inputs. These two advantages allow steel producers to
eliminated coking plants and sinter plants. Purpose of coking plant is to convert non-coking coal
into more efficient fuel and purpose of sinter plant is purify lump ore or pellets for further
processing. Basic inputs to COREX are iron-ore and coal. Jindal Iron & Steel Company (JISCO)
uses COREX technology to produce finished steel.

Induction Arc Furnace (IAF): is one of the most advance processes of making steel. Like EAF
it uses electricity as its main fuel. IAF is most environment friendly and efficient way of
producing steel. However, its lack of refining capacity requires clean products as its inputs.
Large numbers of small steel companies use this technology.

The high weight of the product significantly pushes up transport and movement costs. Therefore
large integrated plants are the norm for cost efficient production. For specialized steel and alloys
efficient production by smaller plants is possible.

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 Types of steel
There are broadly two types of steel according to its composition: alloy steel and non-alloy steel.
Alloying steel is produced using alloying elements like manganese, silicon, nickel, chromium,
etc. Non-alloy steel has no alloying component in it except that are normally present such as
carbon. Non-alloy steel is mainly of three types viz. mild steel (contains upto 0.3% carbon),
medium steel (contains between 0.3-0.6% carbon) and high steel (contains more than 0.6%
carbon). All types of steel other than mild steel are called special steel. It is mainly because a
special care is taken in order to maintain particular level of chemical composition in such steel.
This process gives different properties to the steel according to its composition. In India, non-
alloying steel constitutes about 95 percent of total finished steel production, and mild steel has
large share in it.

According to shape/size/form steel is categorized into different types such as liquid steel, ingots,
semis (semi-finished steel) and finished steel. Liquid steel is a first product that comes out from
Steel Melting Shop. Liquid steel further goes into ingots, and then ingots advance to semis.
Semis are called semi-finished steel products because they are further subject to forging/rolling
in order to produce finish steel products such as flat steel products and long steel products. Crude
steel generally includes ingots and semis.

According to end use, steel is categorized into structural steels, construction steel, deep drawing
Steel, forging quality, rail steel, etc. The following chart depicts various types of steel products
according to different categories.

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Types of Steel Products

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Uses of Steel
Steel is used in a variety of:

• Construction-related applications, such as bolts, nails, and screws,

• Construction of roads, buildings,
• Building Ships, automobile, railways,
• Pipeline transport, mining, offshore construction, aerospace,
• Surgical equipment,
• Cutlery, Wrist watches
• Manufacture of white goods (e.g. washing machines), heavy equipment (e.g. bulldozers),
office furniture, tools, etc.

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 DUTY STRUCTURE AT A GLANCE
(2009-10)

Sr. Item CTH No. Custom Duty Custom Duty

No. 2008-09 2009-10
1 Pig Iron 72.01 5% 5%
2 Semis 72.07 5% 5%
3 Bars & Rods 72.13 5% 5%
4 Structurals 72.16 5% 5%
5 HR Sheets/Plates 72.11 5% 5%
6 HR Coils 72.08 5% 5%
7 CR Coils/Sheets 72.09 5% 5%
8 GP/GC Sheets 72.10 5% 5%
9 HRGO/HRNGO 72.08 5% 5%
72.11
10 HR alloy steel (flat 72.25 5% 5%
rolled) 72.26
11 Tinplates W/W and TFS 72.10 10% 10%
seconds 72.12
12 Defectives/CR/Coils 72.09 10% 10%
13 Stainless steel HR Coils 72.19 5% 5%
for coin blanks
14 Melting Scrap 72.04 0%^ 0%^
15 Re-rollable scrap 72.07 0% 0%
16 Ships for breaking 89.08 5% 5%
17 Iron Ore 26.01 2%^ 2%^
18 Coking Coal of ash 27.01 0% 0%
content below 12%
19 Coking Coal of ash 0% 0%
content above 12%
20 Non-coking coal 27.01 5% 5%
21s Metcoke 27.04 0% 0%
Source:-Ministry of Steel, Government of India
^ In addition there is an export duty of 15% on iron and steel melting scrap and
5% export duty on iron ore other then fines (including lumps and pellets)

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 WORLD ECONOMY
The world economy entered a major downturn during the second half of 2008-09 with all the
advanced economies in the severest economic recession since the World War II. The demand in
both advanced and emerging economies fell sharply resulting in production cuts, cost controls
and lay-offs. Governments and central banks around the world responded to the crisis in an
unprecedented show of policy force in form of various fiscal stimulus and monetary policy
measures. With proper policy and structural reforms, various countries tried to manage the global
crisis in a coordinated manner.

Global economy entering gradual recovery

Now the global economy has bottomed out after its sharpest decline in post-war history. Broad
and comprehensive monetary and fiscal policy measures have staved off an outright crash.
Accordingly, in its October 2009 growth forecast the IWF revised this year’s GDP upward by
0.3% to -1.1%, projecting a respectable 3.1% growth for 2010. The key emerging Asian markets
are expected to resume their fast growth within a relatively short period of time. The US
economy remains mired in weakness at present. Output fell in Q2 2009 for the fourth quarter in a
row (-1%), albeit at a much slower pace. Government stimulus packages and increasing trade
surpluses are having a positive impact on GDP growth, and the banking sector is continuing to
recover, but declining consumer spending poses a problem. Fallen real estate prices, the
necessity of paying off debt, increased commitment to saving and a tremendous rise in
unemployment to 9.8% in September will likely rule out these primary components contributing
to GDP growth in the near future. Japan’s economy posted a slight recovery thanks to huge
government spending and a rise in exports (+6.3% QoQ for Q2 2009). GDP increased by 0.9% in
Q2 2009 versus the previous quarter. The new government’s announcement of additional
stimulus packages and the brightened outlook for exports have further improved economic
prospects. The precarious situation with regard to the state’s finances and fears of rising
unemployment are the primary threats to the economy. The decline in Eurozone economic output
slowed in the second quarter of 2009 to -0.1%. As with many other countries, the reasons include
government stimulus packages and a slight pickup in global demand.

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 World Steel Industry
In the five years before the start of the global financial crisis, the steel industry worldwide
enjoyed a boom in demand. This enabled steel companies to achieve a level of profitability that
funded new investments, acquisitions and continued consolidation within the industry.

This virtuous circle of growing output and beneficial investment came to a halt when steel
demand collapsed in the third quarter of 2008.

When the downturn began, it was categorised as a banking crisis, linked primarily to the US and
Europe, where the banks had over-extended in making loans on property and buying mortgage
securities. It seemed likely that the US and the UK economies might be hardest hit and others
might well escape its worst effects. However, the banking crisis quickly became an economic
crisis on a global scale affecting demand in developing and developed countries, in trade surplus
economies as well as those in trade deficit.

The pace of change was breathtaking. By the first quarter of 2009, many countries had officially
entered recession.

Steel, a global industry, now saw the negative side of globalisation. Demand crashed worldwide.
Large economies such as Germany and Japan were for a time just as badly hit as other regions,
because of the impact on key steel-using customers as markets for their goods disappeared.

Manufacturing markets, especially automotive and mechanical engineering, evaporated. As the

financial crisis worsened, supply chains de-stocked, banks refused to lend so credit dried up and
business confidence sank.

As a result, apparent steel use – which had enjoyed over 7% growth before the crisis – collapsed
in the fourth quarter of 2008. Apparent steel use in 2008 was 1.8% down on 2007.

As the crisis continued in the first half of 2009 in most of the world, apparent steel use in 2009 is
expected to go down by a further 8%-9%.

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The crisis has underlined the ever-increasing importance of emerging economies even more, due
to their relative resilience. In late 2008 and 2009, China and India continued to register growth in
industrial production. In the developed world, steel use was down by 30%.

Capacity

In the past five years global steelmaking capacity grew at a compound annual growth rate
(CAGR) of 7.9%, reaching 1,713 mmt by the end of 2008.

Most of this expansion came from the emerging economies, where steel demand was growing
particularly fast. During 2001-2008, Brazil, Russia, India and China (BRIC) accounted for 89%
of world steel capacity expansion, of which China had the lion’s share.

As steel demand collapsed in late 2008, plant capacity utilisation rates fell from the 85%-90%
range that characterised the previous five years, to below 60% in December 2008.

New projects have been delayed or cancelled and many plants idled. However, in some cases
expansion plans have simply been delayed and new capacity will come on stream in the next few
years. Coping with overcapacity will be a key industry challenge.

Production

• Asia produced 795.4 mmt of crude steel in 2009, an increase of 3.5% compared to 2008.
Its share of world steel production increased to 65% in 2009 from 58% in 2008. Japan
produced 87.5 mmt in 2008, a decrease of -26.3% on 2008. India’s crude steel production
was 56.6 mmt in 2009, 2.8% growth on 2008. South Korea showed a decrease of -9.4%,
producing 48.6 mmt in 2009.
• China’s crude steel production in 2009 reached 567.8 mmt, an increase of 13.5% on
2008. This is a record annual crude steel production figure for a single country. China’s
share of world steel production continued to grow in 2009 producing 47% of world total
crude steel, an increase of 9 percentage points compared to 2008.

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• The EU-27 where all major steel producing countries including Germany, Italy and
France showed substantial decline recorded a decrease of -29.7% compared to 2008,
producing 139.1 mmt of crude steel in 2009.
• The CIS showed a decrease of -14.7% in 2009. Russia produced 59.9 mmt of crude steel,
a -12.5% reduction on 2008 while Ukraine recorded a decrease of -20.2% with year-end
figures of 29.8 mmt.
• In 2009, crude steel production in North America was 82.3 mmt, a decrease of -33.9% on
2008. The US produced 58.1 mmt of crude steel, 36.4% lower than 2008.

Top 10 Steel Producing Countries

Rank Country 2009 2008 %2009/2008

1 China 567.8 500.3 13.5
2 Japan 87.5 118.7 -26.3
3 Russia 59.9 68.5 -12.5
4 US 58.1 91.4 -36.4
5 India 56.6 55.1 2.7
6 South Korea 48.6 53.6 -9.4
7 Germany 32.7 45.8 -28.7
8 Ukraine 29.8 37.3 -20.2
9 Brazil 26.5 33.7 -21.4
10 Turkey 25.3 26.8 -5.6
Source: WSA, Figures in MT

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 World Crude Steel Production, 2008

%of Production

60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
BRIC USA Korea, Japan EU 27 Ukrain ROW
%of Production 49.60% 6.90% 4.00% 9.00% 14.90% 2.80% 12.80%

World Crude Steel Production, 2009

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 %of Production

60.00% 58.30%
50.00%
40.00%
30.00%
20.00%
11.40% 11.90%
10.00%
4.80% 4.00% 2.40%
0.00%
BRIC USA South EU 27 Ukraine ROW
Korea

Steel Exporters

China became the world's largest exporter in 2006 and held that position in 2007 and again in
2008 despite exports falling 14% to 56.2 million tonnes. After peaking in Quarter 3 2008 at 21.3
million tonnes Chinese exports fell to under 10 million tonnes in Quarter 4. Quarter 1 2009 saw
China drop to 6th with just 4.5 million tonnes shipped. Combined shipments by the top ten steel
exporters show quarterly totals of :- Qtr 1 - 61.7 million tonnes : Qtr 2 - 68.4 million tonnes :
Qtr 3 - 72.4 million tonnes : Qtr 4 - 50.6 million tonnes : Qtr 1 2009 - 43.2 million tonnes.

WORLD STEEL EXPORTERS

Rank, 2009 Country 2008 2009 % Change

2009 on 2008

1. EU 27 8.5 6.7 -21

2. Japan 10.2 6.2 -39

3. Russia 7.7 5.7 -26

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 4. Ukraine 7.8 5.7 -27

5. Turkey 4.2 4.7 12

6. China 10.6 4.5 -57

7. South Korea 4.8 4.0 -15

8. Taiwan 2.8 2.3 -17

9. USA 2.8 1.9 -33

10. Brazil 2.4 1.5 -40

Source: WSA, Figures in million tonnes

WORLD STEEL IMPORTERS

Rank, 2009 Country 2008 2009 % Change

2009 on 2008

1. EU 27 9.7 6.3 -36

2. USA 6.8 4.9 -29

3. South Korea 7.6 4.1 -46

4. China 4.2 4.1 0

5. Turkey 3.9 2.2 -44

6. Iran 2.0 1.7 -13

7. Algeria 0.7 1.6 123

8. India 1.7 1.3 -19

9. Vietnam 3.1 1.3 -58

10. Thailand 2.9 1.3 -55

Source: WSA, Figures in million tonnes

Steel Importers

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EU27 imports surged 23% in 2007 to 48.7 million tonnes but fell back 18% in 2008 to 39.7
million tonnes. US imports fell 27% to 29.5 million tonnes in 2007 and a further 4% in 2008 to
28.4 million tonnes. South Korea's 2008 imports rose 9% to 28.1 million tonnes bringing it very
close to surpassing USA as 2nd largest importer. Quarter 1 2009 has seen trade levels fall
sharply with exports to the UAE particularly hard hit and dropping from top 10 importers.

Recovery

Emerging economies, including China and India, started to improve in the first quarter of 2009.
Signs of recovery also started to show in developed economies in the second half of 2009.

Some restoration of consumer and business confidence could be seen everywhere. Surveys in
developed and developing countries showed that consumers were starting to perceive an
improvement in the economic situation. They are more optimistic about the future and spending
patterns are being adjusted accordingly.

The US housing market showed a remarkable rebound in July 2009. German manufacturing
showed the start of an export recovery. By August, there was broad consensus that the worst of
the crisis was over and that the world economy was on the road to recovery.

A major factor has been the government stimulus packages and monetary-easing policies
pursued everywhere in the world.

Even though stimulus packages pulled the global economy out of the worst recession since
World War II, questions remain as to how stable and resilient the recovery will be. In developed
economies, the rebound is partly explained by the end of massive destocking and start of stock
accumulation. The immediate challenge is how momentum can be sustained if governments rein
in their efforts to boost spending and the inventory rebuilding process is over.

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Investment and infrastructure spending will continue to pull steel demand in the emerging
economies. In developed economies, weak housing markets and investment will make growth
less steel-intensive. The overall implication of the crisis for the steel industry will be less growth
in steel demand and an increased importance of the emerging economies.

Efforts to overcome the crisis will make the industry stronger in the long term. Steel companies
with sound structures and healthy finances will emerge prepared for the upturn as it develops.

The industry has already spent billions of dollars on consolidation, restructuring, reorganising
and upgrading. This process must be allowed to continue so that after the recession companies
that continue to serve their customers are fitter, leaner and competitive. It is important that there
is a free and fair market for steel. Governments must resist any measures or support for their
steel industry that provides unfair advantage.

GLOBAL DEMAND OF SEEL

World Region Demand, MT

EU 27 182

Other Europe 29

CIS 50

NAFTA 130

C & S America 43

Middle East/Africa 68

Asia & Oceania 693

WORLD 1195

GLOBAL DEMAND BY FORM

Form Demand, MT

Flat 555

Long 520

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Tube 120

TOTAL 1195

GLOBAL STEEL DEMAND BY END-USE

End Use Demand, MT

Construction 575

Machinery 285

Transport 135

Appliances 55

Fabrication 40

Oil & Gas 40

Shipbuilding 20

Other 45

TOTAL 1195

India has "remained relatively resilient to the global crisis" since apparent steel use is expected to
grow by 8.9% in 2009 and 12.1% in 2010. Conversely, the NAFTA (North American Free Trade
Agreement) region is expected to show a 35.8% decline in apparent steel use in 2009 and then a
positive 17.1% growth in 2010.

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Japan will see its apparent steel use decline by 31.3% this year, and then recover by 15.8% in
2010 to reach 61 million metric tons. Apparent steel use in the CIS (Commonwealth of
Independent States) region is expected to contract by 30.8% in 2009 and then grow in Russia,
Ukraine and Kazakhstan by only 8.2% in 2010.

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 Major Companies in World Steel
The table below shows the top steel producers in 2008. mmt refers to million metric tons of
crude steel output.

2008 2007 2008 2007

Rank mmt Rank mmt Company Rank mmt Rank mmt Company
1 103.3 1 116.4 ArcelorMittal 41 6.9 40 7.4 Jiuquan Steel
2 37.5 2 35.7 Nippon Steel1 42 6.9 41 7.3 Salzgitter5
3 35.4 5 28.6 Baosteel Group 43 6.8 43 6.9 voestalpine
4 34.7 4 31.1 POSCO 44 6.5 39 7.8 Jianlong Group
5 33.3 NA 31.1 Hebei Steel Group 45 6.5 44 6.8 BlueScope
6 33.0 3 34.0 JFE 46 6.4 46 6.4 Metalloinvest
7 27.7 11 20.2 Wuhan Steel Group 47 6.4 47 6.4 Beitei Steel
2
8 24.4 6 26.5 Tata Steel 48 6.1 60 5.2 Guofeng Steel
9 23.3 8 22.9 Jiangsu Shagang Group 49 6.1 51 6.1 SSAB
10 23.2 10 21.5 U.S. Steel 50 6.0 56 5.4 Erdemir
11 21.8 8 23.8 Shandong Steel Group 51 5.9 54 5.9 AK Steel
12 20.4 12 20.0 Nucor 52 5.9 52 6.1 Mechel
13 20.4 13 18.6 Gerdau 53 5.7 53 6.0 Nanjing Steel
14 19.2 15 17.3 Severstal 54 5.6 42 7.0 Ilyich
15 17.7 17 16.2 Evraz 55 5.4 61 5.0 Tonghua Steel
16 16.9 14 17.9 Riva 56 5.3 56 5.6 Xinyu Steel
17 16.0 NA 16.2 Anshan Steel 57 5.2 57 5.5 HKM6
18 15.9 16 17.0 ThyssenKrupp3 58 5.1 NA 4.5 Sanming Steel
19 15.0 18 14.2 Maanshan Steel 59 5.0 59 5.3 CSN
20 14.1 20 13.8 Sumitomo Metal Ind 60 4.7 63 4.6 HADEED
21 13.7 19 13.9 SAIL 61 4.5 68 4.4 Tianjin Tiantie Group

ARCELORMITTAL

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ArcelorMittal is the world's number one steel company, present in more than 60 countries. It
has led the consolidation of the world steel industry and today ranks as the only truly global
steelmaker.

ArcelorMittal is the largest producer of steel in Europe, North and South America, Africa, the
second largest steel producer in the CIS region, and has a growing presence in Asia, particularly
in China. ArcelorMittal has steelmaking operations in 20 countries on four continents, including
66 integrated, mini-mill and integrated mini-mill steelmaking facilities which provide a high
degree of geographic diversification.
ArcelorMittal is a successor to Mittal Steel, a business founded in 1989 by Mr. Lakshmi N.
Mittal, the Chairman of the Board of Directors and Chief Executive Officer of ArcelorMittal. It
has experienced rapid and steady growth since then largely through the consistent and
disciplined execution of a successful consolidation-based strategy.

ArcelorMittal key financials for 2008 show revenues of $124.9 billion and crude steel production
of 103.3 million tonnes, representing approximately 10% of world steel output.

Products and Services

ArcelorMittal is the only producer offering the full range of steel products and services. From
commodity steel to value-added products, from long products to flat, from standard to specialty
products, from carbon steel to stainless steel and alloys, ArcelorMittal offers a complete
spectrum of steel products - and supports it with continuous investment in process and product
research.

Major products are: - flat steel products, long steel products, stainless steel, wire solutions,
plates.

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POSCO
The Pohang Iron and Steel Company, or POSCO, based in Pohang, South Korea, is the world's
second largest steel maker by market value.

POSCO operates two steel mills in the country, one in Pohang and the other in Gwangyang. In
addition, POSCO operates a joint venture with U.S. Steel, USS-POSCO, which is located
in Pittsburg, California.

The company makes hot- and cold-rolled steel products (plate steel, stainless steel, electrical
steel, and wire rods), which it sells to the auto and shipbuilding industries. It produces more than
30 million tons of steel a year, making it the world's number 3 steelmaker behind the combined
ArcelorMittal and Nippon Steel. Subsidiaries include POSCO Engineering & Construction
(which builds steel plants, steel-related infrastructure, and energy facilities) and POSDATA
(systems integration). The South Korean government privatized its stake in POSCO in 2001,
ending the company's 30-year steelmaking monopoly.

With the strong Korean shipbuilding and automobile industry dependent on POSCO for steel, it
has been seen as the bedrock of Korea's industrial development over the past 40 years.

Strategies

POSCO has set its mid-term roadmap with an aim to rise over the challenge of global economic
crisis by proactively coping with the ever-changing global markets. To that end, the company has
come up with 10 initiatives and 100 action plans including emergency management system to
overcome the economic crisis and customer-oriented marketing infrastructure.

Performances

In 2008, POSCO realized KRW 30,642.4 billion of sales, KRW 6,540.0 billion of operating
profits and 33 million tons of crude steel Production. Despite the adverse economic
circumstances, the company was able to achieve this historic business results, driven by its high-
value added product line-up and low-cost production system. While expanding its facilities to
achieve 41 million tons of crude steel annual production in its domestic location, POSCO

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continued to increase its overseas equity investments in Brazil, Australia. It also carried on with
its global base expansion in Vietnam, China and the U.S.

Sales Volume by Product (Unit: 1,000 tons)

2006 2007 2008

Hot-rolled Total Domestic Export
steel
(includingPO)
10,395 10,264 10,700 7,809 2,891
Plate 3,572 3,831 4,593 4,355 238
Wire rod 1,853 2,018 2,020 1,663 357
Cold-rolled 8,971 9,607 10,416 6,064 4,352
steel
Electrical 659 907 932 481 451
steel
Stainless 1,885 1,609 1,306 744 562
Steel
Others 1,208 1,345 1,198 1,076 122
Total 28,543 29,581 31,165 22,192 8,973

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NIPPON STEEL CORPORATION
Nippon Steel Corporation also referred to as Shinnittetsu, was formed in 1970. Nippon Steel
Corporation is the world's second-largest steel producer in volume and the second most
profitable steel company in the world. Nippon Steel was created by the merger of two giants,
Yawata Iron & Steel and Fuji Iron & Steel into a juggernaut.

The Nippon Steel Group undertakes the steelmaking and steel fabrication business as its
mainstay operation. Underpinned by this backbone segment, Nippon Steel is developing business
in five other segments: engineering and construction, urban development, chemicals, new
materials and system solutions. The Company is accelerating initiatives toward establishing a
structure with an annual crude steel production capacity of more than 40 million metric tons. At
the same time, we are stringently adhering to the strategy of growing into a real global player in
the steel industry. To accomplish these goals, the Group is constantly forging its core strengths—
its “technological edge” and “on-site expertise and capabilities.”

Sales (Tonnage) of Iron and Steel Products by Type of Products (1,000 tons)

Years ended March 31 2006 2007 2008 2009

Steel products
29,595 31,514 32,900 28,200

Sections
4,458 4416 4,798 4,082

Flat-rolled products
19,916 21,243 22,243 19,110

Tabular, speciality steel products, secondary 5,220 5,855 5,86 0 5,008

products

BAOSTEEL

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Baosteel Group Corporation (hereinafter as Baosteel) is the most competitive steel complex in China at
present. In 2008, Baosteel registered a sales revenue of RMB 246.839 billion yuan, a total profit of RMB
23.813 billion yuan, a total assets of RMB 352.497 billion yuan and a net assets of RMB 219.435 billion
yuan; the total employees of Baosteel are 108914 people; Baosteel has been enrolled in Global 500 for 6
years consecutively and ranked 220th this year.

The main steel business of Baosteel focuses on the production of hi-tech and high value-added premium
steel, with an annual production capacity around 30 million tons. Baosteel's products sell well at home
and abroad.

While maintaining its dominance in domestic flat product market, Baosteel's products are also
exported to over 40 countries and regions including Japan, South Korea, Europe and America.

Main Products

• Automobile Steel

• Electric Steel

• Stainless Steel

• Pipeline Steel

• Bearing Steel

• Ship Building Plate

• Oil Country Tubular Goods

• High Grade Construction Steel

• Household Electric Appliance Steel

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 Indian Steel Industry
Highlights

1. In 2008 crude steel production was 54.52 million tonnes, a growth of 1.23% over last
year with capacity utilisation at 89% during the year. It grew at more than 9% annually
from 38.72 million tonnes (MT) in 2003-04.

2. Production for sale of total finished steel was at 56.39 million tonnes, a growth of 0.6%
as compared to last year. As against 40.71 MT in 2003-04, an average annual growth of
7.3% was registered.

3. Total finished steel exports decreased by 26 % as it reached an estimated 3.75 million

tonnes while imports were at an estimated 5.77 million tonnes, a decline of 18 %.

4. At 51.85 million tonnes, domestic consumption of total finished steel declined marginally
by 0.53%.

5. The growth was driven by capacity expansion from 43.91 million tonnes per annum
(MTPA) in 2003-04 to 64.40 MTPA in 2008-09.

6. The induction furnace route accounted for 32% of total crude steel production during
2008-2009.

7. India is the fifth largest producer of crude steel in the world during 2008.

8. India also maintained its lead position as the world’s largest producer of direct reduced
iron (DRI) or sponge iron with nearly 20 million tonnes production in 2008-09.

9. As per the revised estimates, the country is likely to achieve a steel production capacity
of nearly 124 million tonnes by the year 2011-12.

10. The steel sector is expected to generate additional employment of around 4 million by
2020 for production of around 295 million tonnes of crude steel by 2019-2020.

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 11. 222 MoUs have been signed with various States for planned capacity of around 276
million tonnes.

Past & Present

The establishment of Tata Iron and Steel Company (TISCO) in 1907 was the starting point of
modern Indian steel industry. At the time of independence in 1947, India had only three steel
plants – the TATA Iron & Steel Company, the Indian Iron and Steel Company and Visveswaraya
Iron & Steel Ltd and a few electric arc furnace-based plants. The period till 1947 thus witnessed
a small but viable steel industry in the country, which operated with a capacity of about 1 million
tonne and was completely in the private sector. From the fledgling one million tonne capacity
status at the time of independence, India has now risen to be the 5th largest crude steel producer
in the world and the largest producer of sponge iron.

Till early 1990s, when economic liberalization reforms were introduced, the steel industry
continued to be under controlled regime, which largely constituted regulations such as large plant
capacities were reserved only for public sector under capacity control measures; price regulation;
for additional capacity creation producers had to take license from the government; foreign
investment was restricted; and there were restrictions on imports as well as exports.

As it traversed its long history during the past 60 years, the Indian steel industry has responded to
the challenges of the highs and lows of business cycles. The first major change came during the
first three Five-Year Plans (1952-1970) when in line with the economic order of the day, the iron
and steel industry was earmarked for state control. From the mid-50s to the early 1970s, the
Government of India set up large integrated steel plants in the public sector at Bhilai, Durgapur,
Rourkela and Bokaro. The policy regime governing the industry during these years involved:

1. Capacity control measures: Licensing of capacity, reservation of large-scale capacity

creation for the public sector units.

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 2. A dual-pricing system: Price and distribution control for the integrated, large-scale
producers in both the private and public sectors, while the rest of the industry
operated in a free market.

3. Quantitative restrictions and high tariff barriers.

4. Railway freight equalisation policy: To ensure balanced regional industrial growth.

5. Controls on imports of inputs, including technology, capital goods and mobilisation

of finances and exports.

The large-scale capacity creation in the public sector during these years contributed to making
India the 10th largest steel producer in the world as crude steel production grew markedly to
nearly 15 million tonnes in the span of a decade from a mere 1 million tonne in 1947. But the
trend could not be sustained from the late 1970’s onwards, as the economic slowdown adversely
affected the pace of growth of the Indian steel Industry. However, this phase was reversed in
1991-92, when the country replaced the control regime by liberalisation and deregulation in the
context of globalisation. The provisions of the New Economic Policy initiated in the early 1990’s
impacted the Indian steel industry in the following ways:
1. Large-scale capacities were removed from the list of industries reserved for the
public sector. The licensing requirement for additional capacities was also
withdrawn subject to locational restrictions.

2. Private sector came to play a prominent role in the overall set-up.

3. Pricing and distribution control mechanisms were discontinued.

1. The iron and steel industry was included in the high priority list for foreign
investment, implying automatic approval for foreign equity participation up to
50%, subject to the foreign exchange and other stipulations governing such
investments in general.

2. Freight equalisation scheme was replaced by a system of freight ceiling.

3. Quantitative import restrictions were largely removed. Export restrictions were

withdrawn.

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The system, therefore, underwent marked changes. For steel makers, opening up of the economy
opened up new channels of procuring their inputs at competitive rates from overseas markets and
also new markets for their products. It also led to greater access to information on global
operations/ techniques in manufacturing. This, along with the pressures of a competitive global
market, increased the need to enhance efficiency levels so as to become internationally
competitive. The steel consumer, on the other hand, was now able to choose items from an array
of goods, be it indigenously manufactured or imported.
This freedom to choose established the sovereignty of the consumer and galvanised steel
producer to provide products/service levels in tune with the needs of the consumers. With the
opening up of the economy in 1992, the country experienced rapid growth in steel making
capacity. Large integrated steel plants were set up in the Private Sector by ESSAR Steel, Ispat
Industries, Jindal Group etc. TATA Steel also expanded its capacity. To sum up, some of the
notable milestones in the period were:
• Emergence of the private sector with the creation of around 9 million tonnes of steel
capacity based on state-of-the-art technology.

• Reduction/dismantling of tariff barriers, partial float of the rupee on trade account, access
to best-practice of global technologies and consequent reduction in costs – all these
enhanced the international competitiveness of Indian steel in the world export market.

After 1996-97, with the steady decline in the domestic economy’s growth rate, the Indian steel
industry’s pace of growth slowed down and in terms of all the performance indicators- capacity
creation, production, consumption, exports and price/ profitability- the performance of the
industry fell below average.
In foreign trade, Indian steel was also subjected to anti-dumping/ safeguard duties as most
developed economies invoked non-tariff barriers. Economic devastation caused by the Asian
financial crises, slowdown of the global economy and the impact of glut created by additional
supplies from the newly steel-active countries (the steel-surplus economies of erstwhile USSR)
were the negative factors.
However, from the year 2002, the global industry turned around, helped to a great extent by
China, whose spectacular economic growth and rapidly-expanding infrastructure led to soaring

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demand for steel, which its domestic supply could not meet. At the same time, recoveries in
major markets took place, reflected by increase in production, recovery of prices, return of
profitability, emergence of new markets, lifting of trade barriers and finally, rise in steel demand
– globally. The situation was no different for the Indian steel industry, which by now had
acquired a degree of maturity, with emphasis on intensive R&D activities, adoption of measures
to increase domestic per capita steel consumption and other market development projects, import
substitution measures, thrust on export promotion and exploring global avenues to fulfil input
requirements.
The rapid pace of growth of the industry and the observed market trends called for certain
guidelines and framework. Thus was born the concept of the National Steel Policy, with the aim
to provide a roadmap of growth and development for the Indian steel industry. The National
Steel Policy (NSP) was announced in November 2005 as a basic blueprint for the growth of a
self-reliant and globally competitive steel sector. The long-term objective of the National Steel
Policy is to ensure that India has a modern and efficient steel industry of world standards,
catering to diversified steel demand. The focus of the policy is to attain levels of global
competitiveness in terms of global benchmarks of efficiency and productivity. The national
policy seeks to facilitate removal of procedural and policy bottlenecks that affect the availability
of production inputs, increased investment in research and development, and creation of road,
railway and port infrastructure. The policy focuses on the domestic sector, but also envisages a
steel industry growing faster than domestic consumption, which will enable export opportunities
to be realised.
As per official estimates, the Iron and Steel Industry contributes around 2% of the Gross
Domestic Product (GDP) and its weight in the Index of Industrial Production (IPP) is 6.20%.
From a negligible global presence, the Indian steel industry is now acknowledged for its product
quality, reflected by trends of rising exports.

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Growth of Steel Industry

The National Steel Policy 2005 had projected consumption to grow at 7% based on a GDP
growth rate of 7-7.5% and production of 110 million tonnes by 2019-2020. These estimates will
be largely exceeded and it is envisaged that in the next five years, demand will grow at a
considerably higher annual average rate of over 10% as compared to around 7% growth achieved
between 1991-92 and 2005-06. It has been assessed that, on a ‘most likely scenario’ basis, the
steel production capacity in the country by the year 2011-2012 will be nearly 124 million tonnes.

The table below shows the trend in production for sale, import, export and consumption of total
finished steel (alloy + non-alloy) in the country during the last six years:

Total finished steel (alloy + non-alloy) (‘000 tonnes)

Year Production for sale Import Expor Consumption
t
2003- 40709 1753 5207 33119
04
2004- 43513 2293 4705 36377
05
2005- 46566 4305 4801 41433
06
2006- 52529 4927 5242 46783
07
2007- 56075 7029 5077 52125
08
2008- 56393 5775 3750 51850
09
Source: JPC
Crude steel production has shown a sustained rise since 2003-04 along with capacity. Data on
crude steel production, capacity and capacity utilisation is given in the table below:

Crude steel
Year Capacity (‘000tonnes) Production (‘000 tonnes) Capacity Utilisation (%)
2003-04 43910 38727 88
2004-05 47995 43437 91
2005-06 51171 46460 91
2006-07 56843 50817 89
2007-08 59845 53857 91

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2008-09 64400* 54520 85
Source: JPC, *= 3 million tonnes capacity added in December 2008.
• The growth was driven by capacity expansion from 43.91 million tonnes per annum
(MTPA) in 2003-04 to 64.4 MTPA in 2008-09.

• Crude steel production grew at more than 8.16% annually from 38.72 million tonnes in
2003-04 to 54.52 million tonnes in 2008-09.

• Production of finished steel at 56.39 million tonnes during 2008-09 as against 40.71
million tonnes in 2003-04 at average annual growth rate of 7.7%.

• With growth in production for sale lagging behind consumption growth, India has turned
into a net importer of finished steel in 2008-09. Exports also declined to ensure greater
domestic availability.

The above performance has been contributed largely by the strong trends in growth of the
electric route of steel making, particularly the induction furnace route, which accounted for 32
per cent of total crude steel production in the country during 2008-09 and has emerged as a key
driver of crude steel production.

Crude Steel Production by Percentage Share (%)

Process Route
2003-04 2009-09*
Blast Oxygen Furnace (BOF) 57 47
Electric Arc Furnace (EAF) 16 20
Induction Furnace (IF) 27 33
Total 100 100
Source: JPC, *= Provisional

• India is also a leading producer of sponge iron with a host of coal based units, located in
the mineral-rich states of the country. Over the years, the coal based route has emerged as
a key contributor to overall production; its share has increased from 60% in 2003-04 to
75% in 2008-09. Capacity in sponge iron making has also increased over the years and
currently stands at 31 million tonnes.

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 • India is also an important producer of pig iron. Post-liberalisation, with setting up several
units in the private sector, not only imports have drastically reduced but also India has
turned out to be a net exporter of pig iron. The private sector accounts for nearly 87%
of total production for sale of pig iron in the country.

Trends in Production
Steel Producers
Broadly there are two types of producers in India viz. integrated producers and secondary
producers. Integrated steel producers have traditionally integrated steel units have captive plants
for iron ore and coke, which are main inputs to these units. Currently there are three main
integrated producers of steel namely Steel Authority of India Limited (SAIL), Tata Iron and
Steel Co Ltd (TISCO) and Rashtriya Ispat Nigam Ltd (RINL). SAIL dominates amongst the
three owing to its large steel production capacity plant size.

Secondary producers use steel scrap or sponge iron/direct reduced iron (DRI) or hot briquetted
iron (HBI). It comprises mainly of Electric Arc Furnace (EAF) and Induction Furnace (IF) units,
apart from other manufacturing units like the independent hot and cold rolling units, rerolling
units, galvanizing and tin plating units, sponge iron producers, pig iron producers, etc. Secondary
producers include Essar Steel Ltd., Ispat Industries Ltd., and JSW Steel Ltd. There are 120
sponge iron producers; 650 mini blast furnaces, electric arc furnaces, induction furnaces and
energy optimizing furnaces; and 1,200 re-rollers in India.

The integrated producers constitute most of the mild steel production in India. Their main
products include flat steel products such as Hot Rolled, Cold Rolled and Galvanised steel. They
also produce long and special steel in small quantities. On the other, secondary producers largely
produce long steel products.

Re-rollers are the units that come under secondary producers’ category, and produce small
quantity of steel like long and flat products. These units either procure their inputs from the

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market or through their backward integrated plants. They use sponge iron, pig iron or
combination to produce finished steel or ingots.
Traditionally Indian steel industry has also been classified into Main Producers (SAIL plants,
TATA Steel and Vizag Steel/RINL), Major Producers (plants with crude steel making capacity
above 0.5 million tonnes — Essar Steel, JSW Steel and Ispat Industries) and Other Producers.
The latter comprises of numerous steel making plants producing crude steel/finished steel (long
product/flat product)/ pig iron/ sponge iron and are spread across the different states of the
country.

The following table highlights the total as also the contribution of the private and public sector in
crude steel production in the country:

Indian Crude Steel Production (in million tonnes)

2004-05 2005-06 2006-7 2007-08 2008-09*
Public Sector 15.912 16.964 17.003 17.091 16.374
Private Sector 27.525 29.496 33.814 36.766 38.146
Total Production 43.437 46.460 50.817 53.857 54.520
% share of public sector 36.6% 36.5% 33.5% 32% 30%
Source: JPC, *=Provisional

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 Category-wise Production for Sale of Finished Steel (Non-Alloy)

2007-08 2008-09*
Category M.P. Other IPT/OC Total M.P. Other IPT/OC Total
1. Non-Flat
Products

Bars & rods 5313 14875 2018 5186 15500 20686

8
Structurals/Spl. Sec. 1003 4040 5043 935 4210 5145
Rails & Rly. Materials 951 135 1086 1012 165 1177
Total (Non-flat 7267 19050 0 2631 7133 19875 0 27008
Products) 7
2. Flat Products

Plates 2688 1369 4057 2498 1495 3993

H R Coils/Skelp/Strips 4707 8977 2010 1167 4577 9730 3300 11007
4
H R Sheets 302 455 757 277 315 592
C R 1891 5560 3012 4439 1657 5145 2200 4602
Coils/Sheets/Strips
GP/GC Sheets 729 3652 4381 711 3870 4581
Elec. Sheet 81 78 159 71 92 163
Tin Plates 15 168 183 19 193 212
TMBP 6 6 0
Tin Free Steel 0 0
Total (Flat Products) 1041 20265 5022 2565 9810 20840 5500 25150
3 6
3. Pipes (Large 85 1250 1335 77 1285 1362
dia.)

TOTAL (Finished 1776 40565 5022 5330 1702 42000 5500 53520
Carbon Steel) 5 8 0
IPT/OC: Inter Plant Transfer/Own Consumption;
TMBP: Tin Mill Black Plates;
MP Main Producers. *= Provisional
Going Global
Global crude steel production reached 1.33 billion tonnes in 2008, a decline of 1.2 percent over
2007. China was the largest crude steel producer in the world with production reaching 502
million tonnes, a growth of 2.6% over 2007. India, which was the eighth largest producer in

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2003, had emerged as the fifth largest producer in 2006. In 2008, the country retained its rank as
the fifth largest crude steel producing country in the world. India also emerged as the largest
sponge iron producing country in the world in 2008, a rank it has held on since 2002. If proposed
expansions plans are implemented as per schedule, India may become the second largest crude
steel producer in the world by 2015-16.
World Crude Steel Production
Country Rank 2008 (in million tonnes)
China 1 502
Japan 2 119
United States 3 92
Russia 4 69
India 5 55
South Korea 6 54
Germany 7 46
Ukraine 8 34
Italy 10 31
Source: World Steel Association.

The rejuvenated steel market in the country has already witnessed the announcements of mega
expansion plans of leading domestic producers in the form of Greenfield and/or Brownfield
projects in different parts of the country.
• The decision of Posco, South Korea, to set up their 12 million tonnes integrated steel
plant in Orissa has given the Indian steel industry a feel of what ‘globalisation’ is all
about,

• This was soon followed by Mittal Group’s announcement of plans to set up their 12
million tonnes integrated steel unit in Orissa.

However, the domestic Indian steel producers did not lag behind. Indian conglomerate TATA
Steel’s $12 billion takeover of Anglo-Dutch giant Corus Group Plc, transformed TATA Steel
Ltd. into the world’s 5th largest steel producer, which may well be regarded as a benchmark even
in the history of the Indian steel industry. Such developments only prove that the Indian steel
industry has entered a mature phase.

Category-Wise Exports
Category 2005-06 2006-07 2007-08 2008-09*

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Semis (Non-Alloy) 388.3 665.3 284.0
FINISHED STEEL (Non-Alloy)
Bars & Rods 387.0 329.0 213.0 161.0
Structurals 89.4 75.0 73.0 73.0
Plates 149.8 106.5 153.0 190.0
H R Sheets/Coils 1371.1 1580.3 1391.0 943.0
C R Sheets/Coils 450.5 386.4 510.0 327.0
GP/GC Sheets 1842.6 2173.3 20206.0 1530.0
Electrical Sheets 24.4 1.5 25.0 7.0
Tinplates 43.0 37.0 36.0 82.0
Pipes 120.0 203.5 200.0 169.0
Total Finished Steel (Non-Alloy) 4477.8 4892.5 4627.0 3482.0
Total Steel (Non-Alloy) 4866.1 5557.8 5000.0 4036.0
Total Steel (Alloy) 323.0 349.0 450.0 261.0
Pig Iron 440.1 706.7 560.0 261.0
Sponge Iron 42.3 55.6 38.6
*provisional

Indian Steel Industry, 2008-09*

Item Quantity (mt) % Change
Total Finished Steel Production for Sale 56.39 0.6%
Import 5.72 -19.0
Export 3.66 -28.0
Capacity Utilisation 89% -
Source: JPC, *= Provisional

Future Outlook
India is the only major economy expected to show positive growth in steel use in 2009. Indian
consumption is forecast to grow about 2% (WSA). Besides achieving the rank of the 5th largest
global crude steel producer, India has also made a mark globally in the production of Sponge
Iron/Direct Reduced Iron. Domestic crude steel production grew at a compounded annual growth
rate of 7 per cent during 2004-05 to 2008-09. The increase in production came on the back of
capacity expansion, mainly in the private sector plants, and higher utilisation rates. This growth
was driven by both capacity expansion (from 47.99 million tonnes in 2004-05 to approximately
64 million tonnes in 2008-09) and improved capacity utilisation. India, the world’s largest

92
producer of direct reduced iron (DRI) or sponge iron, is also expected to maintain its lead in the
near future. Sponge iron production grew at a CAGR of 16% to reach a level of 20.80 million
tonnes in 2008-09 compared to 12.36 million tonnes in 2004-05. India is expected to become the
second largest producer of steel in the world by 2015-16, provided all requirements for fresh
capacity creation are met. Courtesy a mushrooming growth of coal-based sponge iron units in
key mineral-rich pockets of the country, domestic production of sponge iron increased rapidly,
enabling the country to achieve and maintain the number one position in the global market. With
a series of mega projects, either being implemented or at the proposal stage, which once
operational will re-write the structure of the steel industry and its dynamics; and a domestic
economy carrying forward the reform process further, the future of the Indian steel industry is
definitely optimistic.

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 Major Players of the Indian Steel Industry

National Mineral Development Corporation LTD

NMDC is a Mini-Navratna enterprise of the Government of India , incorporated on November
15, 1958 and is engaged in the business of developing and harnessing mineral resources of the
country (other than coal, oil, natural gas and atomic minerals).
Presently, its activities are concentrated on mining of iron ore, diamonds and silica sand. NMDC
operates the large mechanised iron ore mines in the country at Bailadila (Chattisgarh) and
Donimalai (Karnataka).
All the iron ore production units have been accredited with ISO 9001:2000 and ISO 14001:2004
certifications and the R&D centre of NMDC has also been accredited with ISO 9001:2000
certification.
NMDC is an integral part of the Indian steel industry as it provides the required raw material for
steel production.

RASHTRIYA ISPAT NIGAM LIMITED (RINL)

Visakhapatnam Steel Plant (VSP) is the first shore based integrated steel plant located at
Visakhapatnam in Andhra Pradesh. The plant was commissioned in August 1992 with a capacity
to produce 3 million tonnes per annum (MTPA) of liquid steel. The plant has been built to match
international standards with state-of-the-art technology, incorporating extensive energy saving
and pollution control measures. VSP has an excellent layout capable of expanding up to 16
MTPA.
Within a short period of time since its commissioning, the plant achieved high levels of
performance in production and technological norms. Right from the year of its integrated
operation, VSP established its presence both in the domestic and international markets with its
superior quality of products. VSP has been awarded all the three international standards
certificates, namely, ISO 9001:2000, ISO 14001:1996 and OHSAS 18001:1999.
RINL registered a sale of Rs. 10,458 crore (estimated) during 2008-09 surpassing the level of Rs.
10,433 crore achieved in 2007-08. Sales in the domestic market stood at Rs. 10,379 crore and
exports at Rs. 79 crore during 2008-09. By producing over 20.08 lakh tonnes of value added

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steel products during the financial year 2008-09, VSP registered a growth of 6% over the
corresponding period of last year.
Special Steel sales volume of 19.81 lakh tonnes has been achieved for the year 2008-09, which is
8.4% higher than that of the last year i.e. 2007-08. During 2008-09, sales through District Level
Dealers has been 42,000 tonnes, representing a growth of 23% over the last year, i.e., 2007-08.
During the current financial year 2008-09, based on the estimated figures, the company has
registered a net profit of Rs. 1,307.76 crore (after tax).

ISPAT Industries Limited

Ispat Industries Limited (IIL) is one of the leading integrated steel makers and the largest private
sector producer of hot rolled coils in India. Set up as Nippon Denro Ispat Limited in May 1984
by founding chairman Mr M L Mittal, IIL has steadily grown into a Rs 9,400-crore company,
assuming its position as flagship of the reputed Ispat Group, a corporate powerhouse with
operations in iron, steel, mining, energy and infrastructure.
Headquartered at Mumbai, IIL employs a total of 3000 people and is the leader in the national
speciality steel market. The company's core competency is the production of high quality steel,
for which it employs cutting edge technologies and stringent quality standards.
It produces world-class sponge iron, galvanized sheets and cold rolled coils, in addition to hot
rolled coils, through its two state-of-the art integrated steel plants, located at Dolvi and
Kalmeshwar in the state of Maharashtra.
The sprawling 1,200 acres Dolvi complex houses the 3 million tonne per annum hot rolled coils
plant, that combines the latest technologies - the Conarc process for steel making and the
compact strip process (CSP) - introduced for the first time in Asia.
IIL is expanding its HRC capacity to 3.6 million. With investments of over US $2 billion, IIL is
the seventh largest Indian private sector company in terms of fixed assets.

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TATA STEEL LIMITED
Established in 1907, Tata Steel is India's largest integrated private sector steel company. The
company is backward integrated with owned iron ore mines and collieries. With its competitive
advantage in raw materials, efficient operations and the benefits of a recently-completed $2.3
billion programme of modernisation, Tata Steel is among the lowest cost steel producers in the
world. Its steel plant at Jamshedpur produces four million tonnes of hot and cold rolled flat and
long products.
Tata Steel's products include hot and cold rolled coils and sheets, tubes, wire rods, construction
bars, structurals, forging quality steel, rings and bearings. In an attempt to 'decommoditise' steel,
the company has recently introduced brands like Tata Steelium (India's first branded cold rolled
steel), Tata Shaktee (galvanised corrugated sheets), Tata Tiscon (re-rolled bars), Tata pipes, Tata
bearings, Tata Wiron (galvanised wire products) and Tata Agrico (hand tools and implements).

Production & Sales

Items
Figures in ‘ooo tonnes
December
The crude
2008 2009 % Change FY’09
steel
Hot Metal 566 651 15 1699
production of
TATA Steel Crude Steel 494 600 21 1497

during the Saleable Steel 334 592 77 1235

period 2008- Sales 368 636 73 1071
09 was 5.6
million tonnes which is higher by 12% over the production of 5.0 million tonnes last year. The
saleable steel production was at a higher level during the period April 2008-March 2009 (5.3
million tonnes) compared to the corresponding period last year (4.9 million tonnes).

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ESSAR STEEL LIMITED

Essar Steel Ltd., the Indian company of Essar Steel Holdings Limited, is the largest steel
producer in western India, with a current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to
increase this to 8.5 MTPA. The Indian operations also include an 8 MTPA beneficiation plant at
Bailadila, Chattisgarh, which has the world’s largest slurry pipeline of 267 km to transport
beneficiated iron slurry to the pellet plant, and an 8 MTPA pellet complex at Visakhapatnam.
The Essar Steel complex at Hazira in Gujarat houses the world’s largest gas-based single
location sponge iron plant, with a capacity of 4.6 MTPA. The complex also houses the steel plant
and the 1.4 MTPA cold rolling complex. The steel complex has a complete infrastructure setup,
including a captive port, lime plant and oxygen plant.
ESSAR Steel is a fully integrated flat carbon steel manufacturer—from iron ore to ready-to-
market products with. It is a global producer of steel with a footprint covering India, Canada,
USA, and Asia.
Essar Steel utilises Hot Briquetted Iron-Direct Reduced Iron (HBI-DRI) technology supplied by
Midrex Technology, USA along with four 150 tonnes DC electric arc furnaces imported from
Clecim, France. The Hazira unit of Essar Steel is equipped with 5.5 million tonnes per annum
(MTPA) hot briquetted iron plant, 4.6 MTPA electric arc furnace, 4.6 MTPA continuous caster,
3.6 MTPA hot strip mill and 1.4 MTPA cold rolling mill. During the year 2007-08, Essar was
awarded costs ISO/TS 16949 and OHSAS 18000 certification.
ESSAR Steel is India's largest exporter of flat products, selling almost one-third of its production
to the highly demanding US and European markets, and to the growing markets of South East
Asia and the Middle East. Some of the major client companies are Caterpillar, Hyundai, Swaraj
Mazda, the Konkan Railway and Maruti Suzuki.

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JSW STEEL LIMITED

JSW Steel is a 6.8 million tonnes per annum (MTPA) integrated steel plant, having a process
route consisting broadly of iron ore beneficiation — pelletisation — sintering — coke making —
iron making through blast furnace, as well as Corex process which entails steel making through
the following process route: BOF-continuous casting of slabs — hot strip rolling — cold rolling
mills.
JSW Steel has the distinction of being certified ISO-9001:2000 Quality Management System,
ISO-14001:2004 Environment Management System and OHSAS 18001:1999 Occupational
Health and Safety Management System. The Brownfield expansion plan of the Vijayanagar plant
is in progress and is likely to be completed by 2010, with a total installed capacity of 9.6 MTPA.
• Domestic revenue increased 18% from Rs. 9,022 crores in 2007- 08 to Rs. 10,681 crores
in 2008-09. This significant increase was due to the increased focus on the domestic
market pursuant to the slump in global economies in the second half of 2008-09. The
Company strengthened its dealership network across India which enabled it to market its
products on a Pan-India basis.

• Crude Steel Output up by 3% to 3.724 million tonnes in 2008-09.

• The Company has export footprint in over 100 countries. Majority of the exports
comprised value added products. Interestingly, in the first half of 2008-09, export
realisations ware higher than that of domestic market as the steel industry voluntarily
agreed with Government of India to hold back the hike in steel product prices in the local
market.

JSW Steel, Tarapur and Vasind Works

JSW Steel Tarapur and Vasind Works specialise in down-streaming facilities which include: 1.0
MTPA cold rolling, 0.9 MTPA hot dip galvanising (HDG), 0.1 MTPA colour coating, 0.1 MTPA
CRCA products and 0.3 MTPA hot rolled plates capacity. JSW Steel has a distinction of being
certified to ISO-9001:2000 Quality Management System

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 STEEL AUTHORITY OF INDIA LTD

The Steel Authority of India Limited (SAIL) is a company incorporated on January 24, 1973,
registered under the Indian Companies Act, 1956 and is a Maharatna enterprise of the
Government of India. Mr. S. K. Roongta is the Chairman of this company which has an annual
production of 13.5 million metric tons making it the 16 th largest steel producer in the world.
Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL is a
fully integrated iron and steel maker. It manufactures and sells a broad range of steel products,
including:

• hot and cold rolled sheets and coils,

• galvanised sheets, electrical sheets,

• structurals,

• railway products,

• plates, bars and rods,

• stainless steel and other alloy steels.

SAIL produces iron and steel at five integrated plants and three special steel plants, located
principally in the eastern and central regions of India and situated close to domestic sources of
raw materials, including the Company's iron ore, limestone and dolomite mines. It produces both
basic and special steel for domestic engineering, railways, power, construction, defence and
automotive industries and for sale in export markets also.

• The five integrated steel plants are at Bhilai (Chattisgarh), Rourkela (Orissa), Durgapur
(West Bengal), Bokaro (Jharkhand), and Burnpur (West Bengal).

92
 • While, the three special and alloy steels plants are Alloy Steels Plant at Durgapur (West
Bengal), Salem Steel Plant at Salem (Tamil Nadu) and Visveswaraya Iron and Steel Plant
at Bhadravati (Karnataka)

The company has the distinction of being India’s second largest producer of iron ore and of
having the country’s second largest mines network. This gives SAIL a competitive edge in terms
of captive availability of iron ore, limestone, and dolomite which are inputs for steel making.

Capital Structure

• The authorised capital of SAIL is Rs. 5000 crore.

• The paid-up capital of the company was Rs. 4130.40 crore as on March 31, 2009, out of
which 85.82% is held by the Government of India and the balance 14.18% by the
financial institutions/GDR-holders/banks/employees/individuals etc.

Ownership and Management

The Government of India owns about 86% of SAIL's equity and retains voting control of the
Company. However, SAIL, by virtue of its ‘Maharatna’ status, it enjoys significant operational
and financial autonomy.

Financial Performance

The company recorded turnover of Rs. 48,681 crore in the financial year 2008-09. The post-tax
net profit for the year was Rs. 6,175 crore. The company has paid interim dividend @ 13% of
paid up equity capital for the year 2008-09. Further, subject to approval of shareholders, the
Board of Directors has recommended a final dividend @ 13% of the paid-up equity, thus making
the total dividend @ 26% of paid-up capital for the year.

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92
 SAIL has a country wide network of over 2000 dealers.

This ensures availability of quality steel in virtually all the districts of the country.

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Guiding Principles of SAIL
The company shall:
• Create a positive footprint within the society to make a meaningful difference in the lives
of people by continually aligning its initiatives to the goals for sustainable development.

• Maintain commitment to quality, health and safety in every respect of the business and
people.

• Undertake ethical business practices across the supply chain. Make positive impact on the
environment and promote good Environmental practices.

• Promote equality of opportunity and diversity of workforce throughout its business

operation.

Major Policies of SAIL

Quality Policy
We shall build and sustain a world class organization, where quality is the hallmark of every
process and activity.
With the involvement and dedication of our human recourse, we are committed to achieve
satisfaction of all our stakeholders, through innovation and continual improvement.

Safety Policy
Steel Authority of India Limited (SAIL) is committed to:
Safety of its employees and the people associated with it including those living in the
neighborhood of its plants, mines and units.
Pursue safety efforts in a sustained and consistent way by establishing safety goals, demanding
accountability for safety performance and providing resources to make safety programmes work.

Corporate Social Responsibility Policy

SAIL recognizes that its business activities have direct and indirect impact on the society. The
Company strives to integrate its business values and operations in an ethical and transparent
manner to demonstrate its commitment to sustainable development and to meet the interests of

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its stakeholders. The Company is committed to continuously improving its social
responsibilities, environment and economic practices to make positive impact on the society.
Achievements
• Golden Peacock Award for Combating Climate Change – 2008 for BSP, Occupational
Health and Safety – 2008 for BSL.

• SAIL also featured in the 2008 list of Forbes Global 2000 companies at position 647.

• National Institute of Personnel Management conferred the National Award on SAIL for
Best HR Practices 2008.

• SAIL was adjudged as the top Indian company under the Iron and Steel Sector for the
Dun & Bradstreet – Rolta Corporate Awards 2008.

Environmental Awards and Accolades

SAIL plants have been awarded various prizes for environmental management in their plants
during the last three years viz.

• Golden Peacock special appreciation for CSR, first in Indian Steel Industry,
• Sustainabilit Award, 2006, organized by CII, New Delhi,
• Golden Peacock Innovation Award, 2006 instituted by IOD, New Delhi,
• Greentech Gold Award in metal sector for outstanding achievements in Environment
Management for the year 2007 for BSP and RSP,
• Golden Peacock Environment Environment Management Award, 2007 for BSP,
• Indira Gandhi Memorial Excellent Pollution Control Award,
• Jawaharlal Nehru Memorial Excellent Pollution Control Implementation Award and
• Golden Peacock Innovative Product/ Service Award for eco innovative services.

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 PRODUCT MIX OF SAIL
Hot Rolled Coils, Sheets and Skelp Hot
rolled coils, sheets and skelp (narrow coil), are
the largest product category of the company in
terms of both sales volume and revenue. Hot
rolled coils are primarily used for making pipes
and have many direct industrial and
manufacturing applications, including the
construction of tanks, railway cars, bicycle
frames, ships, engineering and military
equipment and automobile and truck wheels, frames and body parts.

Hot rolled coils are also used as feedstock for cold rolling mills where they undergo further
processing. Hot rolled coils are also delivered to the company's own cold rolling mills and
silicon sheet mill and pipe plant in a wide range of widths and thicknesses as the feedstock for
higher value-added steel products. The company is the largest producer of hot rolled coils, sheets
and skelp in India.

Cold Rolled Products

Cold rolling of hot rolled products produces a
superior surface finish, improves the physical
properties of the steel, such as tensile strength,
and reduces its thickness to precise gauges. As
a result, cold rolled products generally
command higher prices than hot rolled
products.

The products of the cold rolling mill include

cold rolled sheets and coils, which are used primarily for precision tubes, containers, bicycles,
furniture and for use by the automobile industry to produce car body panels. Cold rolled products
are also used for further processing, including for colour coating, galvanizing and tinning.

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The company also produces further processed cold rolled products, including galvanized sheets
and tin plates.

Plates

Steel plates are used mainly for the manufacture of

bridges, steel structures, ships, large diameter
pipes, storage tanks, boilers, railway wagons and
pressure vessels. The company also produces
weatherproof steel plates for the construction of
railcars.

The company is currently the largest producer of

steel plates in India with a domestic market share of
more than 80 per cent for these products. The company is the only producer of wide and heavy
plate products in India.

Semi-Finished Products

The company produces semi-finished products,

including blooms, billets and slabs, which are converted
into finished products in the company's processing plant
and, to a lesser extent, sold to re-rollers for conversion
to finished products.

Structurals

Structural steel products are produced through a process

of hot rolling in the section or structural mills. They are
long steel products with cross sections of various shapes.
I-beams, channels and angle steel are used in mining, the

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construction of tunnels, factory structures, transmission towers, bridges, ships railways and other
infrastructure projects.

Bars and Rods

The company produces steel bars and rods through a process of hot rolling billets in the finishing
mills. Reinforcement steel and wire rods are primarily used by the construction industry. The
company is one of the largest producers of reinforcement bars in India which are primarily sold
to the construction industry.

Speciality Products

Speciality products, include electrical sheets, tin plates and pipes. Electrical sheets are cold rolled
products of silicon steel for electrical machinery. Tin plates are cold rolled steel electrolytically
coated with tin for food packaging. Pipes are longitudinally or spirally welded from hot rolled
coils for conveying such things as water, oil and gas.

Alloy and Stainless Products

In addition to the steel products indicated above, SAIL produces a wide range of alloy steel
products at ASP,SSP and VISL. Elements including chromium, nickel, vanadium and
molybdenum are used in the alloy mixture to impart special properties to steel. These alloy steels
are primarily used for sophisticated applications, including in the automobile, railway and
defence industries.

A wide variety of alloy and stainless steel plates, hot rolled sheets, cold rolled sheets, bars,
billets, blooms, forgings and die blocks are manufactured at ASP in an Electric Arc Furnace.
SAIL is able to produce different qualities of alloy steels to meet the requirements of its
customers. To increase steel's corrosion resistance properties, nickel and chromium are used in
the making of stainless steel. SSP produces cold rolled stainless steel coils and sheets with
thickness ranging from 0.3 mm to 6 mm and width ranging from 500 mm to 1,250 mm. These
materials can be produced in a large number of grades for different applications. Stainless steel
products are used for diverse applications including household utensils, automobile trims,

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conveyor belts, elevators, chemical and food processing equipment, building and interior
decoration and pharmaceutical equipment.

Product Mix, Product-Wise

Semis Blooms, Billets & Slabs

Structurals Crane Rails
Long Products Bars, Rods & Rebars
Wire Rods
HR Coils, Sheets & Skelp
Plates
CR Coils & Sheets
Flat Products GC Sheets\ GP Sheets
and Coils
Tinplates
Electrical Steel
Tubular Products Pipes
Rails
Railway Products Wheels, Axles, Wheel
Sets

The product category-wise sales turnover during 2008-09 was as follows:

Products Category % of sales value

Saleable Steel: 49.4
Flat Products 39.1
Long Products 1.7
PET (Pipes, Electrical
sheets, Tin plates)
Products
Integrated Steel Plants 90.2
Alloy & Special Steel 4.8
Plants
Total Saleable Steel 95.0
Secondary products 5.0
(ingots, pig iron, scrap,
coal chemicals etc.)

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Total 100

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 Steel Plants of SAIL
Plant-Wise Products

Blooms, Billets & SlabsBeams

Channels, Angles
Crane Rails
Bhilai Steel Plant
Plates
Rails
Pig Iron, Chemicals & Fertilisers
HR Coils & Sheets
Plates
Bokaro Steel Plant CR Coils & Sheets
GP Sheets & Coils/ GC Sheets
Pig Iron, Chemicals & Fertilisers
Blooms, Billets & Slabs
Joists, Channels, Angles
Bars, Rods & Rebars
Durgapur Steel Plant
Skelp
Wheels, Axles, Wheel Sets
Pig Iron, Chemicals & Fertilisers
HR Coils
Plates
CR Coils & Sheets
GP Sheets/ GC Sheets
Rourkela Steel Plant
Tinplates
Electrical Steel
Pipes
Pig Iron, Chemicals & Fertilisers

Salem steel plant Stainless steel

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Bhilai Steel Plant
Bhilai Steel Plant (BSP) is an Integrated Steel Plant and India's sole producer of rails and heavy
steel plates and major producer of structural. The plant is the sole supplier of the country's
longest rail tracks of 260 metres. With an annual production capacity of 3.153 MT of saleable
steel, the plant also specializes in other products such as wire rods and merchant products. Since
BSP is accredited with ISO 9001:2000 Quality Management System Standard, all saleable
products of Bhilai Steel Plant come under the ISO umbrella.

Bhilai IS0:14001 has been awarded for Environment Management System in the Plant,
Township and Dalli Mines. It is the only steel plant to get certification in all these areas. The
Plant is accredited with SA: 8000 certification for social accountability and the OHSAS-18001
certification for Occupational health and safety. These internationally recognised certifications
add value to Bhilai's products and helps create a place among the best organizations in the steel
industry. Among the long list of national awards it has won, Bhilai has bagged the CII-ITC
Sustainability award for three consecutive years.

Bhilai Steel Plant

PRODUCT-MIX TONNES/ANNUM
Semis 5,33,000
Rail & Heavy Structural 7,50,000
Merchant Products
(Angles, Channels, Round & 5,00,000
TMT bars)
Wire Rods (TMT, Plain &
4,20,000
Ribbed)
Plates (up to 3600 mm
9,50,000
wide)
Total Saleable steel 31,53,00

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BOKARO STEEL PLANT
Bokaro Steel Plant an Integrated Steel Plant, is hailed as the country’s first Swadeshi steel plant,
built with maximum indigenous content in terms of equipment, material and know-how. Its first
Blast Furnace started on 2nd October 1972 and the first phase of 1.7 MT ingot steel was
completed on 26th February 1978 with the commissioning of the third Blast Furnace.

Bokaro is designed to produce flat products like Hot Rolled Coils, Hot Rolled Plates, Hot
Rolled Sheets, Cold Rolled Coils, Cold Rolled Sheets, Tin Mill Black Plates (TMBP) and
Galvanised Plain and Corrugated (GP/GC) Sheets. Bokaro has provided a strong raw material
base for a variety of modern engineering industries including automobile, pipe and tube, LPG
cylinder, barrel and drum producing industries.

Bokaro Steel is working towards becoming a one-stop-shop for world-class flat steel in India.
The modernisation plans are aimed at increasing the liquid steel production capacity, coupled
with fresh rolling and coating facilities. The new facilities will be capable of producing the most
premium grades required by the most discerning customer segments.

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DURGAPUR STEEL PLANT
Set up in the late 50's with an initial annual capacity of one million tonnes of crude steel per year,
the capacity of Durgapur Steel Plant (DSP) was later expanded to 1.6 million tonnes in the 70's.
A massive modernisation programme was undertaken in the plant in early 90's, which, while
bringing numerous technological developments in the plant, enhanced the capacity of the plant to
2.088 million tonnes of hot metal,1.8 million tonnes crude steel and 1.586 million tonnes
saleable steel. The entire plant is covered under ISO 9001: 2000 quality management system.

The modernized DSP now has state-of –the-art technology for quality steel making. With the
successful commissioning of the modernized units, DSP is all set to produce 2.088 million tones
of hot metal, 1.8 million tones of crude steel and 1.586 million tones of saleable steel annually.

It is situated on the banks of the Damodar river. The Grand Trunk Road and the main Calcutta-
Delhi railway line pass through Durgapur.

DURGAPUR STEEL PLANT

PRODUCT-MIX TONNES/ANNUM
Merchant Products 2,80,000
Structural 2,07,000
Skelp 1,80,000
Wheels & Axles 58,000
Semis 8,61,000
Total Saleable steel 15,86,000

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Rourkela Steel Plant
Rourkela Steel Plant (RSP), the first integrated steel plant in the public sector in India, was set up
with German collaboration with an installed capacity of 1 million tonnes. Subsequently, its
capacity was enhanced to 1.9 million tonnes.

RSP presently has the capacity to produce 2 million tonnes of hot metal, 1.9 million tonnes of
crude steel and 1.67 million tonnes of saleable steel. It is SAIL’s only plant that produce silicon
steels for the power sector high quality pipes for the oil & gas sector and tin plates for the
packaging industry. Its wide and sophisticated product range includes various flat, tubular and
coated products. Almost all major units of the plant, including its Personnel Department and
Steel Township, are certified to ISO:9001 standards.

Being situated on the Howrah-Mumbai rail mainline, Rourkela is very well connected with most
of the important cities of India.

The nearby airports are Ranchi (173 km), Bhubaneswar (378 km) and Kolkata (413 km).
Rourkela also has an airstrip maintained by RSP.

PRODUCT-MIX TONNES/ANNUM
Plate Mill Plates 2,99,000
HR Plates 92,500
HR Coils 3,98,000
ERW Pipes 75,000
SW Pipes 55,000
CR Sheets & Coils 4,33,000
Galvanized Sheets 1,60,000
(GP& GC)
85,000
Electrolytic Tin-
Plates 73,500

Silicon Steel 16,71,000

Sheets
Total Saleable
Steel

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 Products Applications
HR Coils LPG cylinders, automobile, railway
wagon chasis and all types of high
strength needs.
Plates Pressure vessels, ship building and
engineering structures
Chequered Plates Flooring & staircases in the industrial
installations, railway platforms, etc.
CR Sheets & Coils Steel furniture, white goods like
refrigerators, washing machines,
automobile bodies, railway coach
panelling, drums, barrels, deep
drawing and extra deep drawing,etc
Galvanised Sheets Roofing, panelling, industrial
sheeting, air conditioner ducting and
structural
Containers for packaging of various
products including edible oils,
vegetables and confectionary items.
Electrolytic Tin Plates Small generators, stators for high
efficiency rotating equipment and
relays, etc.
Silicon Steel sheets & Coils High pressure transportation of crude
oil, natural gas and slurry
transportation, water supply, sewage
disposals, grain silos, civil
engineering pilings, etc.
Spiral Weld pipes High pressure transportation of oil &
water, sewage disposal, tube wells,
etc.

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Alloy Steels Plant
The pioneer in the production of alloy and special steels. Alloy Steels Plant (ASP), Durgapur
was commissioned with an initial capacity of 1,00,000 tonnes of ingot steel and 60,000 tonnes of
saleable steel. Through two phases of expansion and modernization, the capacity has been
revised to 2.46 lakh tonnes of liquid steel and 1.78 lakh tonnes of saleable steel.

ASP has the capacity to produce Slabs, Blooms, Bars, Plates and Forged items of over 400
grades in a wide range of sizes.

ASP is equipped with state-of-the-art technology for producing world-class quality alloy and
special steels. is specially designed for casting special steels like Austenitic and Ferritic stainless
steel and a variety of non-stainless steels including bulletproof steel. The continuous casting
machine is equipped with a state-of-art Electro-Magnetic Stirrer in its mould for casting Blooms.

It also produces value added items like Cold Rolling Mill rolls, Concast rollers, crane wheels,
springs, hammers, grate bars, hot saw blade, shear blade, bright bar, stainless steel liner plate,
etc. ASP is also supplying import substitution item components to many customers through
established conversion agents.

ISO-9001 (2000) certification for the entire plant.

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MAHARASHTRA ELEKTROSMELT LTD.
Maharashtra Elektrosmelt Ltd (MEL) is a Subsidiary of Steel Authority of India Ltd, a
Government of India Enterprise and the largest Manganese based Ferro Alloy producer in the
country. MEL has an installed capacity of 1,00,000 TPY equivalent Ferro Manganese.

The product range of MEL includes High Carbon Ferro Manganese, Silico Manganese and
Medium/Low Carbon Ferro Manganese. It is accredited with Quality Assurance Certificate ISO
9001:2000.

MEL's major infrastructure facilities include two nos. of 33 MVA Submerged Electric Arc
Furnaces for the production of ferro alloys, Manganese Ore Sintering Plants, Furnace gas based
Power Plant and one small Electric Arc Furnace for the production of MC/LC Ferro Manganese
with Lime Calcination and Manganese Ore Roasting Unit.

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 PLANT WISE EXPORT PRODUCTS
Sr. No. PRODUCT PLANT
1. Billets Bhilai Steel Plant
Billets Durgapur Steel Plant
Billets IISCO Steel Plant
2. Cold-rolled Coils Bokaro Steel Plant
3. Cold-rolled Sheets Bokaro Steel Plant
4. Electrical Steels Rourkela Steel Plant
5. Galvanized Coils Bokaro Steel Plant
6. Hot-rolled Coils Bokaro Steel Plant
Hot-rolled Coils Rourkela Steel Plant
7. Hot-Rolled Plates/Sheets Bokaro Steel Plant
8.. Pig Iron IISCO Steel Plant
Reversing Mill Plates
Bhilai Steel Plant
9. Reversing Mill Plates
Rourkela Steel Plant
10 Rails Bhilai Steel Plant
11. Wire Rods Bhilai Steel Plant

12. Customized Products Service Centre

PLANT-WISE FINANCIAL PERFORMANCE
(Rs. in Crore)
Plant/Unit 2008-09 2007-08
Bhilai Steel Plant (BSP) 4,965.45 5,366.37
Durgapur Steel Plant (DSP) 754.25 1,008.61
Rourkela Steel Plant (RSP) 1,011.20 1,401.33
Bokaro Steel Plant (BSL) 1,292.78 2,830.43
IISCO Steel Plant (ISP) -182.36 -285.19
Alloy Steels Plant (ASP) -110.25 2.69
Salem Steel Plant (SSP) 2.82 102.74
Visvesvaraya Iron & Steel Plant (VISL) -149.29 -58.79
Central Units/RMD 1,818.85 1,100.54
SAIL: Profit Before Tax (PBT) 9,403.45 11,468.73
SAIL: Profit After Tax(PAT) 6,174.81 7,536.78

Joint Ventures
S&T Mining Company Pvt. Ltd

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SAIL has incorporated a joint venture company with TATA Steel for joint acquisition &
development of coal blocks/mines. New indigenous opportunities for coking coal development
are being explored by the Joint Venture company for securing coking coal supplies.

NTPC SAIL Power Company Pvt. Ltd (NSPCL)

A 50:50 joint venture between Steel Authority of India Ltd. (SAIL) and National Thermal Power
Corporation Ltd. (NTPC Ltd.); manages the captive power plants at Rourkela, Durgapur and
Bhilai with a combined capacity of 314 megawatts (MW). It has installed additional capacity by
implementation of 500 MW (2 x 250 MW Units) power plant at Bhilai. The commercial
generation of 1st Unit has commenced in April’2009 and the 2nd Unit in October 2009.

Bokaro Power Supply Company Pvt. Limited (BPSCL)

This 50:50 joint venture between SAIL and the Damodar Valley Corporation formed in January
2002 is managing the 302-MW power generating station and 660 tonnes per hour steam
generation facilities at Bokaro Steel Plant. BPSCL has proposed to expand its capacity by
installing 2x250 MW coal based thermal unit at Bokaro. In addition, construction activities are
underway for installation of 9th Boiler (300T/Hr) & 36 MW Back Pressure Turbo Generator
(BPTG) project at Bokaro.

SAIL&MOIL Ferro Alloys (Pvt.) Limited

SAIL has incorporated a joint venture company with M/s Manganese Ore (India) Ltd on 50:50
basis to produce ferro-manganese and silico-manganese required for production of steel.

Bhilai JP Cement Ltd

SAIL has incorporated a joint venture company with M/s Jaiprakash Associates Ltd to set up a
2.2 MT slag based cement plant at Bhilai. The company shall commence cement production at
Bhilai by March'2010, whereas clinker production at Satna shall start within 2009.

Bokaro JP Cement Ltd

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SAIL has incorporated another joint venture company with M/s Jaiprakash Associates Ltd to set
up a 2.1 MT cement plant at Bokaro utilizing slag from BSL. The project implementation is
under progress with commencement of cement production likely by July’2011.

MOUs

SAIL has the following MOUs with:

Larsen & Toubro Ltd (L&T)– To jointly set up, develop, manage and own
captive/independent power plant(s) at suitable location/s to meet future power requirements of
SAIL including opportunities to own captive thermal coal blocks to cater to the power plants’
requirements.

Rashtriya Ispat Nigam Ltd. (RINL)- To jointly explore and develop low silica limestone mines
in the Sultanate of Oman.

POSCO– To establish strategic alliance for cooperation in a wide range of business &
commercial interest areas.

IIM, Ahmedabad and Management Development Institute (MDI), Gurgaon- for knowledge
sharing,

Siemens Ltd- for manpower training.

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 CENTRAL UNITS OF SAIL

Central Coal Supply Organization (CCSO)

Central Coal Supply Organization (CCSO), a unit of SAIL, is situated in Dhanbad District of
Jharkhand and has branch offices at Kolkata, Asansol, Adra and Bilaspur.

The major functions of CCSO are as follows-

• Actual assessment of quality of coking coal at loading points by proper sampling and
analysis.

• Linkage of raw coal from BCCL and CCL to TATA and Chasnalla washeries for
enhancing washed coal.

• Finalization of long term and short term MoU with the coal companies.

• Centralized payment and settlement with the coal companies.

• Study of different coking coal with Central Mines and Fuel Research Institute (CMIFR),
Digwadih and RDCIS, Ranchi for its usage.

CCSO looks after the daily movement of Indigenous washed coking coal and boiler coal to SAIL
steel plants; BSP, RSP, DSP, BSL and ISP by continuous follow up and liaison with the CIL
subsidiaries such as Bharat Coking Coal Limited (BCCL), Dhanbad, Central Coalfields
Limited(CCL), Ranchi, Western Coalfields Limited (WCL), Nagpur, Eastern Coalfields Limited
(ECL), Sanctoria (W.B), South Eastern Coalfields Limited (SECL), Bilaspur, Mahanadi
Coalfields Limited (MCL), Sambalpur (Orissa) and different Railway Zones.

R&D Centre for Iron and Steel

The Research & Development Centre for Iron & Steel (RDCIS) at Ranchi is the corporate R&D
unit of SAIL. Set up in 1972, the Centre has ISO: 9001 certification to its credit. It undertakes
R&D projects in diverse realms of Iron & Steel Technology under the categories of Plant

92
Performance Improvement (PPI), Product Development (PD), Scientific Investigation and
Development (SID), Basic Research (BR) and Technical Services.

RDCIS has more than 300 dedicated and competent scientists and engineers and its laboratory is
equipped with around 300 sophisticated diagnostic research equipment and 5 pilot plant.

RDCIS also offers technological services to various organizations in the form of Know-how
transfer of technologies developed by RDCIS

Consultancy services; Specialized testing services; Contract research; Technology Awareness

Programmes.

RDCIS Clientele includes

Tiajpromexport, Russia Tata Steel Ltd., Jamshedpur

DSI, USA BHEL-WRI, Tiruchirappalli
MSCO, Iran Southern Railway, Chennai.
Foolad Technic, Iran NINL, Bhubaneshwar
EISCO, Egypt Indian Oil Corp., R&D, Faridabad
SAIBIC, Soudi Arabia Hindustan Petroleum Corp., Mumbai
DRDL, Hyderabad Balmer Lawrie & Co. Ltd., Kolkata
IGCAR, Kalpakkam VSSC, Thiruvananthapuram
RINL, Visakhapatnam RDSO, Lucknow
MECON Ltd., Ranchi Uttam Galva Steels Ltd., Khopoli
CIL, Kolkata Jindal Steel & Power Ltd., Raigarh

Growth Division

Growth Division (GD) functions as a nodal agency for manufacture and supply of various spare
parts and equipment to the SAIL Plants by utilizing available in-house facilities and vendor base.
GD functions focus on effective utilization of the engineering shops in the steel plants. Main
objectives of GD are:

• Effective utilization of captive engineering facilities of each steel plant.

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 • Providing technical help to manufacture specified equipment to cater to present
requirement as well as long-term expansion and modernization.

• Undertake projects within SAIL plants or outside.

Centre for Engineering & Technology

Center for Engineering & Technology (CET), an ISO: 9001 certified organization, is the design,
engineering & consultancy unit of SAIL. It has its Head Office at Ranchi, Sub Centres at Bhilai,
Durgapur, Rourkela, Bokaro, Burnpur & Bhadravati, Unit Offices at Bangalore, New Delhi for
formulation of Interplant Standards for Steel Industry. As a solution provider for all project
needs, CET had been rendering complete range of services not only to the Steel Plants under
SAIL but also to various clients other than SAIL – both within and outside the country. Some of
the important clients other than SAIL include EGITALEC (Egypt), Ashok Steel (Nepal),
Chittagong Steel Mills (Bangladesh), Birla Copper, Mukand Ltd., Jindal Vijayanagar Steels Ltd.,
National Iron & Steel Co., Hindustan Zinc Ltd., National Mineral Development Corporation and
Romelt- SAIL (India) Ltd

The range of services includes conceptualization, project evaluation & appraisal, project
consultancy, design & engineering and project management in the areas of iron and steel making

CET represents a reservoir of technical & managerial expertise inherited over four decades of
Indian Steel Industry. It has kept pace with changing times and made continuous efforts for
updating skills of engineers through planned HRD programmes, other professional organization
of repute and acquiring up-to-date hardware’s & software’s for engineering work. All of these
are blended with a concern for client’s profitability to ensure that the clients get the most cost
effective solution, tailor- made for their requirement.

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 Central Marketing Organization
Central Marketing Organization (CMO), headquartered in Kolkata, is India’s largest industrial
marketing set-up. It markets carbon steel produced by the five integrated steel plants of SAIL.
This ISO 9001:2000 certified organization transacts its business through a network of

• 37 Branch Sales Offices spread across the four regions,

• 25 departmental Warehouses equipped with mechanized handling systems,
• 42 Consignment Agents and 26 Customer Contact Offices.

CMO’s domestic marketing effort is supplemented by its ever widening network of rural dealers
who meet the demands of the smallest customers in the remotest corners of the country. With the
total number of dealers crossing 2,000, SAIL's wide marketing spread ensures availability of
quality steel in virtually all the districts of the country. CMO through its joint venture partner
M/s Metal Junction has simplified steel buying by providing net based facilities through its on
line ‘e store’, providing door delivery facilities to small house-builders.

A strong IT support system enables real-time network connectivity within the entire CMO
network. Extensive customer contact, product and segment specialization, close monitoring of
order servicing and feedback analysis through a Customer Satisfaction index are established
norms at CMO. The customer-friendly approach of CMO is backed by practical after-sales
service. Through the process of Key Account management, CMO provides single-window
service to key customers across the country for every business transaction from enquiry to order
booking, order tracking to delivery, and even consultancy and after-sales service

92
 International Trade Division
International Trade Division (ITD) an ISO 9001:2000 accredited unit of CMO based in New
Delhi undertakes exports of Mild Steel products and Pig Iron from SAIL’s five integrated steel
plants. Ever ready to meet the exacting demands of its global customers, ITD maintains a close
liaison with customers and the production units to cater to the Customized requirements of its
customers both in terms of quality and sizes.

ITD undertakes export of SAIL’s varied product basket which includes, Rails, Structurals,
Merchant Products, Wire Rods, Re-Bars, Plate Mill Plates, Hot Rolled Coils, Hot R. Plates/
Sheets, Cold Rolled Steels, Galvanised Steels, Cold Rolled Non Oriented (CRNO) coils,
Chequered Plates, Slabs, Billets and Pig Iron.

ITD has successfully established SAIL’s brand name globally. Some of the major countries
where ITD has exported SAIL’s products are as follows:

• Japan, • Europe (UK, Germany, France,

• China, Korea, Belgium, Italy, Spain, Netherlands,

• Taiwan, Portugal),

• Vietnam, Philippines, • Sudan, Oman,

• Singapore, Malaysia, • UAE and the neighbouring countries

• Thailand, Indonesia, such as Bangladesh, Sri Lanka and

Nepal.
• Australia,

The Transport & Shipping Division of CMO headquartered at Kolkata with its branch offices
at Haldia, Paradip, Vizag and Kolkata ports, ensures timely import of the key ingredient in steel
making, coking coal and handles its entire logistics. It also caters to other plant imports and
ensures efficient dispatch of steel exports.

T&S Division is accredited with ISO 9001:2000 certification.

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 SAIL’s Global Reach
SAIL’s products have found ready acceptance in about 75 countries the world over. Products
exported to various countries include Mild Steel Billets, Slabs, Wire rods, Structurals, Hot-rolled
Plates/Coils/Sheets, Cold-rolled Coils/Sheets, Rails, CRNO Steels and Pig Iron. SAIL’s Mild
Steel and Pig Iron exports are undertaken by its International Trade Division (ITD) based in New
Delhi.

Being a manufacturer of world-class steel products, SAIL offers to its customers a wide product
profile matched with excellent service, and a choice ranging from widely traded items like Hot
Rolled Coils to specialty products like CRNO steels. Annually it produces over 12 million tonnes
of various steel products, to meet the exacting requirements of both domestic as well as overseas
customers. Its vision for the future encompasses a presence in major markets of the world.

Exports 1999-2008 in MT

• SAIL’s export data shows a declining trend.

• In 2008-09 SAIL’s export became almost half of its exports in 2003-04.

• This decline can be attributed to increase in domestic demand and prevailing uncertainty
in the international financial market.

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• Another reason of the decline in exports is aggressive exports from SAIL’s competitors
like TATA Steel.

Product-Wise % of Export, 2007-08

H R Coil Export, 1999-2008 in MT

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 Steel Authority of India Limited
International Trade Division
New Delhi

Highlights of Export Performance for 2008-09

1. Turnover (in crore):-

• 2008-09: Rs. 841.2

• 2007-08: Rs. 1152

2. Export Volume (in M/T):-

• 2008-09: 251530

• 2007-08: 471890

3. Share of Neighbouring Markets in Total Exports:-

• 2008-09: 54.58%

• 2007-08: 50.35%

• 2006-07: 56.46%

4. New Markets Explored:-

• BQ Plates: Kuwait, Uganda.

• HT Plates: South Africa, Bangladesh.

• GC Sheets: Myanmar.

5. Special Grade Products Exported:-

• BSP High Tensile Plates.

• BSP Ship Building Plates.

6. New Initiative:-

• New Product exported: first ever export of BQ Plates, GC Sheets.

• 1st Time Export of SAIL Plates to African & Gulf Countries.

• Export of Plates to America resumed after 10 years.

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 QUALITY OBJECTIVES
International Trade Division
Steel Authority of India Limited
2009-10

• TO ACHIEVE 0.635 MILLION TON OF EXPORT SALES.

• TO RESPOND TO CUSTOMERS ENQUIRY WITHIN ONE WORKING DAY.

• TO ACHIEVE A MINIMUM CSI OF 85%.

• TO ACHIEVE ATLEAST 50% EXPORT QUANTITY IN THE NEIGHBOURING

COUNTRIES.

• TO EXPORT TO TWO NEW COUNTRIES WHERE NO EXPORTS DONE IN THE

LAST THREE YEARS.

• TO EXPORT ATLEAST ONE NEW PRODUCT NOT EXPORTED IN THE LAST

THREE YEARS.

• TO ACHIEVE REDUCTION IN PENDING DEMURRAGE DISPATCH CLAIMS AS

ON 1/4/09 BY 10%.

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 SWOT ANALYSIS OF SAIL

Strength

The diversified product mix and multi location production units are an area of strength for the
company. SAIL as a single source is able to cater to the entire steel requirement of any customer.
Also it has a nation wide distribution network with a presence in every district in India. This
makes quality steel available throughout the length and breadth of the country. SAIL has the
largest captive iron ore operations in India, which takes care of its entire requirement. With plans
in place to expand the mining operations, the company will continue to be self sufficient in iron
ore after completion of the present phase of expansion. SAIL's captive power plants take care of
about 60% of its total power need. With augmentation of capacities of power plants operated
under Joint Venture, the company will continue to have security in this key input in future as
well.

SAIL's large skilled manpower base is a source of strength. There is emphasis on skill based
training in the company. The expanded capacity will be operated with more or less similar
number of employees in future. In fact, with selective recruitment and regular

attrition on account of superannuation, the number of employees is likely to come down over
time; while there will be improvement in overall skill set. The company has one of the biggest
in-house research and development centres in Asia. SAIL's RDCIS (Research &Development
Centre for Iron & Steel) is a source of regular product and process innovation. Low overall
borrowings lend strength to the company's balance sheet as it can mobilize resources while
keeping the leveraging at manageable levels.

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Weakness

SAIL is dependent on the market purchase for a key input – coking coal. As India does not have
sufficient coking coal deposits, most of the supply is from external sources. As international
practice in purchase of coking coal is through annual price contract it exposes the company to
market risk if the steel prices crash but input prices remain unchanged.A large manpower base
results in higher manpower cost as a proportion of turnover for the company. Although there has
been significant reduction in manpower through natural and voluntary separations, the manpower
strength in SAIL is still higher than the industry average. A part of the operations in the company
continue to be from Energy inefficient processes viz. open hearth and ingot route of production,
which will be eliminated only after the completion of the current expansion program. At present
around 20% of the products are in the form of semi - finished steel, resulting in lower value
addition. New rolling mills planned under expansion plan will contribute to value addition as
almost all semis will be converted to finished steel. SAIL being a Public Sector unit has to follow
set procedures in conducting its business. On occasions, it slows down the decision making with
attendant fallout.

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Opportunities

SAIL has five main integrated Steel Plants which have a combined capacity of 12.5 million
tonnes of crude steel and 10.74 million tones of saleable steel with modernized facilities
available to meet diverse customized requirements in terms of quality, size, grade, delivery etc.
The current per capita finished steel consumption in the country is approx. 44 kg as compared to
the likely world average of around 190 kg. There is a substantial scope for increase in domestic
steel consumption. Although during 2008-09, steel consumption contracted by 1.2% in the
country, steel demand in India is poised to grow at a modest pace with thrust on infrastructure in
the 11th Plan period. Approval to 37 infrastructure projects worth Rs.70,000 crore between
August 2008 and January 2009 is likely to trigger steel demand. Expectations of 6%-7% growth
in GDP in 2008-09 with possibility of its returning to higher growth trajectory in 2009-10, higher
elasticity of steel demand with respect to growth in GDP due to investment in plant and
machinery and push to construction activities are expected to boost steel demand. The size range
and quality makes SAIL'S long products a preferred choice for project customers. In case of flat
products, SAIL remains a major supplier of HR Coils to the tube making sector and is slowly
increasing its presence in cold reducing segment. The Plates from SAIL are rated amongst the
best and are in good demand from project Customers. India is emerging as a major hub, both for
the automobile and for the auto components sector. The water supply and oil & gas sectors are
the other segments where there is a large growth potential. The modernized ERW Pipe Mill at
Rourkela Steel Plant is able to cater to the requirement of these sectors. Bokaro Steel Plant and
Bhilai Steel Plant are also producing small quantities of API grade HR Coil and Plates for
servicing these sectors. SAIL has undertaken its expansion plan keeping these opportunities in
mind. The recessionary business environment while imposing a great challenge has also led to
new pockets of opportunity. All the companies that are in the midst of expansion plan can take
up capital projects at much more competitive rates than feasible earlier. With a number of
companies deferring their projects in the wake of uncertain demand, the competition in the
equipment supplying industry has intensified, leading to reduction in project cost. Lowering of
commodity and metals prices is also going to bring down the cost of capital projects.

SAIL is in the midst of its expansion plan which after completion will add 10 million tonnes to
its saleable steel capacity. The expansion plan will enable the company to increase the proportion

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of high value steel to more than 50% from the existing level of slightly more than 30%.
Induction of rolling mills will eliminate the proportion of semis in SAIL's product-mix, around
20% as of now, and enable enhancement in value realization. Also, new products being
introduced will help in supplying state of art products to railways, construction, auto, and oil &
gas segments. Slowdown in general economic activity has also made the cost of coking coal and
other mines abroad more affordable. This is likely to give a sustained advantage in the long run.

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Threats

International prices of steel dropped by over 60% from their peak level in July, 2008. With
import duty at 5%, and poor demand from developed countries, cheap imports are on an increase
into the country putting pressure on realisation of the domestic steelproducers. Although green
field expansion plans have suffered a setback due to implosion of demand, brown field capacities
are coming up in the country. Some of the steel majors have added capacities during 2008- 09
and some new capacities are likely to come on-line by 2009-10. Greenfield capacity expansions
will re-emerge sooner in India compared to other countries due to positive signs of demand
prospects. There is substantial excess capacity for galvanised products in the country, which
necessitates its exports in good volumes. Due to setback in export, the domestic market is
suffering a negative impact and which has also had a cascading effect on Cold Rolled & Hot
Rolled coils. With significant excess capacity in the global steel industry during 2009 there is a
threat of dumping cheap steel to India which is likely to be the only major steel consuming
nation with a positive growth. Clearance and renewal of mining lease, which involve multiple
agencies at the State and Central levels, are an area of concern. Delay in opening new mines, and
/ or expanding existing mines may constrain raw materials availability, thereby impacting growth
in saleable steel production, and overall economics of operation. Law and order situation in
mining areas in some of the states is also a cause of concern for smooth operations in remote
areas.

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 Hot rolling
Semi-finished products called blooms, billets and slabs are transported from the steelmaking
plant to the rolling mills. In many plants steelmaking and rolling are both carried out on the same
site. However there are also many stand-alone rolling mills (some are independently owned
while others are part of a larger group but located away from the steelmaking works).

Steel products can be classified into two basic types according to their shape: flat products and
long products. Slabs are used to roll flat products, while blooms and billets are mostly used to
roll long products. Billets are smaller than blooms, and therefore are used for the smaller type of
long product. Uniquely, at Corus' Teesside works, slabs are used ingeniously to roll large long
products (such as beams).

Semi-finished products are first heated in a re-heat furnace until they are red hot (around 12000
C). On all types of mill the semi-finished products go first to a roughing stand. A stand is a
collection of steel rolls (or drums) on which pressure can be applied to squeeze the hot steel
passing through them, and arranged so as to form the steel into the required shape. The roughing
stand is the first part of the rolling mill. The large semi-finished product is often passed
backwards and forwards through it several times. Each pass gradually changes the shape and
dimension of the steel closer to that of the required finished product.

Plate mills

Slabs are used to make plate. Typically, after leaving the plate mill's roughing stand, they are
passed through a finishing stand. This is a reversing mill: like on the roughing stand, the steel is
passed backwards and forwards through the mill. It is also turned 900 and rolled sideways at one
stage during the process.

Plate is a large, flat piece of steel perhaps 10mm or 20mm thick (although it can be up to 50mm
thick) and up to 5 metres wide. It is used for example to make the hulls and decks of ships or to
make large tanks and boilers. It can also be rolled up and welded to form a large steel tube, used
for oil and gas pipelines.

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Strip mills

Slabs are also used to make steel strip, normally called hot rolled coil. After leaving the roughing
stand, the slab passes continuously through a series of finishing stands which progressively
squeeze the steel to make it thinner. As the steel becomes thinner, it also of course becomes
longer, and starts moving faster. And because the single piece of steel will be a whole range of
different thicknesses along its length as each section of it passes through a different stand,
different parts of the same piece of steel are travelling at different speeds. This requires very
close control of the speeds at which each individual stand rolls; and the entire process is
controlled by computer. By the time it reaches the end of the mill, the steel is travelling at about
40 miles per hour. Finally the long strip of steel is coiled and allowed to cool.

Hot rolled strip is a flat product which has been coiled to make storage and handling easier. It is
a lot thinner than plate, typically a few millimetres thick, although it can be as thin as 1mm. Its
width can vary from 150mm to nearly 2 metres. It frequently goes through further stages of
processing such as cold rolling and is also used to make tubes (smaller tubes than those made
from plate).

Long product mills

Blooms and billets are used to make long products. After leaving the roughing stand, the piece of
steel passes through a succession of stands which do not just reduce the size of the steel, but also
change its shape. In a universal mill, all faces of the piece of steel are rolled at the same time. In
other mills, only two sides of the steel are rolled at any one time, the piece of steel being turned
over to allow the other two sides to be rolled.

Long products are so called because they come off the mill as long bars of steel. They are
however produced in a vast range of different shapes and sizes. They can have cross-sections
shaped like an H or I (called joists, beams and columns), a U (channels) or a T. These types of
steel "section" are used for construction. Bars can have cross-sections the shape of squares,
rectangles, circles, hexagons, angles. These bars can also be used for construction, but many
types of bar are also used for engineering purposes. Rod is coiled up after use and is used for

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drawing into wire or for fabricating into products used to reinforce concrete buildings, as are
some types of bar.

Other types of long product include railway rails and piling. Some long product mills make
unique shapes of steel to a customer's individual specification. These are known as special
sections.

Cooling

In all rolling processes, cooling the steel is a critical factor. The speed at which the rolled product
is cooled will affect the mechanical properties of the steel. Cooling speed is controlled normally
by spraying water on the steel as it passes through and/or leaves the mill, although occasionally
the rolled steel is air-cooled using large fans.

Further processing

Hot rolled products can undergo many forms of further processing before they are finally used to
make an end-product (such as a steel-framed building or a consumer product). Such processing
includes:

• Cold rolling and drawing

• Fabricating - Steel sections are cut, welded and otherwise prepared to form the steel
frame of a building. Rods and bars are similarly cut and shaped to form the steel
reinforcement for concrete buildings.

• Coating

• Cutting and slitting - Service centres cut steel into many complex shapes.

• Profiling - Sheet steel may be pressed into the correct shape for crash barriers or the
cladding of buildings (known as profiling)

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HOT ROLLED COILS

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Demand

Demand for flat products from mills in European markets has held up well during the summer
slowdown, and appears to have exceeded supply during August in southern Europe. It is now
essential that this firmer demand continues during September and into Q4. The producers appear
to be anticipating stronger off-take as they begin to schedule higher production. Prices have been
easing for flat products in Asia, while US producers have announced further increases for
September. Flat products end-user sectors, such as automotive and appliances, continue to
improve. Sentiment among buyers globally appears uncertain that demand will be strong enough
to maintain these higher prices, but de-stocking may be finishing for most products. Long
products demand remains weaker than expected, except in Asia where prices are increasing,
while prices are just firmer in Europe and steady but under pressure in US. Even if demand
improves, production may increase too quickly, especially if Chinese exports hit the international
market.

Producers of flat products in US announced increases of US$ 60/short ton during August which
consolidated the earlier rises, but actual demand was weak and these increases may reduce
demand further. The cutbacks on last year’s production levels have had the necessary effect, but
the sharp increase in July’s output, expected to continue in August and September, could
overwhelm demand.

Flat products prices in northern Europe have hardly risen during August, despite the leading
mills seeking increases of Eur 20-30/tonne for Q3. Real demand has been fair, but will need to
improve further towards the end of the third quarter as destocking should be coming to an end.
The mills’ output cuts from last year’s levels have been sufficient to bolster the market so far, but
the leading producers are aiming to increase production in apparent expectation of firmer
demand. There will be pressure for the price increases to hold this time, aided by further
announced rises, and prices should slowly improve if demand returns to levels seen before the
holiday period.

Meanwhile HR, CR and HDG coil prices in southern Europe have been steadily rising during
August after reaching a low-point earlier in the year. Prices should be able to at least hold steady

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and possibly move upwards from these levels, unless mills’ output exceeds demand. All coil
prices are now back to similar levels to those in northern Europe. Demand has been reasonable
during the last few weeks, with reduced production leading to firmer prices.

For buyers in South East Asia, all coil prices have been slipping steadily during August, with HR
coil prices falling US$ 40-50/tonne. Chinese export prices have dropped sharply to earlier levels
in line with domestic pricing and so will become competitive in some markets. Volumes
exported remain low so far this year, but are expected to increase strongly in Q4.

Domestic HR and CR coil spot prices in China have fallen sharply during August, as the market
undergoes a correction after the strong gains of the summer months. Apparent domestic demand
had been very firm, but it appears that a proportion may have been speculatively bought and led
to increased stock levels.

PRICES

Flat products prices are being increased in US by the producers with another US$ 60/short ton
rise, but have slipped in South East Asia. All northern European coil prices have been just firmer
during August. Southern European prices have risen more strongly from their earlier decreases
and deeper lows. Price levels of Chinese exports of HR coil are being reduced, so they are likely
to be appearing in some international markets.

Prices in USA have risen by US$ 30/short ton during August, but the next increases will take HR
coil prices up to the US$ 600/st (US$ 661/t) level. As demand is still not very strong, there may
be resistance to these levels later in Q4, though rising scrap prices may help some of the
increases to stick. Inventory levels in US continue to be low, but there is still scope for further
reduction as the year-end approaches. CR Coil prices increased from US$ 520- 560/st (US$ 573-
617/t) and should reach US$ 600-640/st (US$ 661-705/t) in September. HD Galvanised coil
should also increase to US$ 620-660/st (US$ 683-727/t).

South East Asian HR coil prices were around US$ 40/t below July price levels at US$ 550-
580/tonne cfr. Chinese suppliers HR Coil export offers are easing down to US$ 530-550/t fob in
August, and should fall further to attract export business in September.

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CR and HDGalvanised coil prices in SE Asia both rose slightly, but buyers began to hold off
expecting the weaker Chinese market to be reflected in their suppliers’ asking prices. CR Coil is
now at US$ 700-730/t cfr in SE Asia during August and likely to ease in September.
HDGalvanised coil prices were also firmer at US$ 770-800/t.

Flat producers in northern Europe saw spot prices hardly gain during August even though they
had announced higher prices. Spot demand had improved towards the end of Q2, but it is unclear
whether it will return to this level during September and Q4.

HR Coil prices in northern Europe were just higher at Eur 420-475/t (US$ 602-681/t) during
August but should slowly increase in September. CR Coils were also just higher at Eur 480-520/t
(US$ 688-745/t). HD Galvanised products prices have increased the most, Eur 40/tonne, and are
now in the range Eur 580-640/t (US$ 831-917/t).

However, southern European prices have increased more strongly after falling further, but price
levels are now similar to those in northern Europe. The Spanish and Italian mills decreased
output during July and (probably) August, which helped to match the lower demand. Prices
should also increase slowly in September unless import activity increases. HR Coil prices are
now at Eur 380-400/t (US$ 545-573/t), while CR Coil prices are Eur 440-460/t (US$ 631-659/t).
HDGalvanised Coil prices were also firming at Eur 430-460/t (US$ 616-659/t) during August
and expected to continue to rise going into September.

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Application of HR Coils

• Parts for precision equipment. • Knives, rulers, scissors.

• Kitchen utensils, Containers, Tanks. • For making different types of Blades

like razor blades and surgical blades.
• Oil refinery or Paper industry
equipment, Suitable for welding. • Beer Barrels

• Nitric acid tanks, heat resistant parts. • Cooling Coils Cryogenic Vessels and
Components
• Chemical, dye, paper & food
processing industry equipment. • Dairy Equipment

• Chemical plant equipment, heat • Evaporators

exchanger.
• Feed water Tubing
• Chemical plant equipment, heat
• Food handling Equipment
resistant parts, parts for aero
industry. • Hypodermic Needles

• Chemical industry equipment, heat • Milking Machines

resistant parts, parts for aero
industry. • Nuclear Vessels & Components

• Kitchen utensils & tableware, stove • Pressure Vessels

pipes, building materials, car parts.

• Sanitary Fittings and Valves

• Exterior decoration for cars.

• Shipping Drums

• Turbine blades & parts.

• Still Tubes

• Knives, mechanical parts, shaft.

• Textile Dying Equipment

Galvanized steel coil is used for Automobile Industries. galvanized steel coil is used for Washing
Machines, Bathroom Doors, Agriculture, Roofing, Ducting , Rolling Shutters. galvanized steel
coil is also used for Electrical Appliances, Containers etc.

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 FINDINGS

• Crude steel production has shown a sustained rise since 2003-04 along with
capacity.

• India is the 5th largest steel producer with the total of 55 million tonnes of
steel.

• SAIL is at 21st position in the world, in terms of total steel production.

• In 2008-09 SAIL’s export became almost half of its exports in 2003-04.

• This decline can be attributed to increase in domestic demand and prevailing

uncertainty in the international financial market.

• SAIL is more focused on fulfilling the domestic demand rather than

international.

• While Flat items are not expected to witness a significant revival in

consumption in 2009-10, Long products would continue to spur major
demand in the steel sector during the year.

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 RECOMMENDATIONS

• SAIL CAN PLAY A GREATER AND MORE ACTIVE ROLE IN THE

WORLD STEEL MARKET.

• SETTING UP OF AN EXPORT OFFICE IN SOUTH-EAST ASIAN

COUNTRIES LIKE THE ONE IN NEPAL.

• BRAND PROMOTION

• QUALITY CONTROL SO AS TO OFFER WORLD CLASS PRODUCTS

• REDUCTION IN IMPACT ON ENVIRONMENT

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 CONCLUSION
During the first 9 months of 2009, India stands as the 3rd largest curde steel producer in the
world, next only to China and Japan. In other words, Indian steel, it can be stated without
exaggeration, has emerged as a key player in the global steel scenario. On a similar term, the
steel consumption in India has also been rising consistently in the range of 9-13%, over the past
5 years, with an average annual growth rate of 9.6%. If this growth is sustained, our per capita
steel consumption will cross 100 Kg figure by the 2015, up from 47 Kg currently.

In the developing economic background of India, the domestic steel consumption is driven
mostly by growth in construction, housing and infrastructure sectors. Nearly 50% of the steel
consumed in India is construction oriented. The balance is consumed by automobile, consumer
goods and other diverse utilities. India, currently produces a large varities of steel products
ranging from basic grades to highly sophisticated steel materials for satellites and nuclear
reactors. We have the required technology and manpower skill available for delivering the
quality designs to meet all types of required applications of steel. As a matter of fact, the current
phase of modernization and expansion of Public Sector Steel Units, aims not only in expanding
production capacities, but also in diversifying the product base in qualitative terms.

One of the major reasons for our low per capita steel consumption is the lack of focus on vast
rural sectors. As per the last survey carried out, about 5-6 years back, the per capita steel
consumption in rural sector used to be two kilogram per annum. There is definitely some
improvement over the last 2-3 years, considering that a large number of infrastructure and rural
housing projects have been taken up under various schemes of the Government. But, there is an
urgent need for a large scale improvement in rural steel consumption in the country.

Steel usage most innovate itself, until now, the steel product innovation has been solely
depending upon the Architects and Design Engineers. To overcome this limitation, I urge upon
the steel industry to be proactive in steel application designs. Better quality and lower cost of
application will certainly be acceptable by the users by way of value offers. This will be one of
the most positive ways of improving steel consumption. The Research and Design (R&D) in

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steel sector should put higher emphasis on steel intensive product innovations and design
applications.

For steel to be acceptable, in preference to other replacements, the common man must find that it
is affordable and is cost effective. In this regard, the stability of price of steel in the market plays
a very important role. The steel producers must keep this aspect in mind, while deciding on the
market price of common varieties of steel, used for mass consumption by common man.

The steel industry should be profitable over the complete business cycle. It rewards shareholders
and re-invests in new products and processes. Steel companies minimise their environmental
footprint and conduct their operations in a sustainable way. The steel industry has strong growth
potential in developing and industrialised countries.

Steel is a high-tech industry with skilled people working in a safe environment. It attracts bright
people to follow a career in steel. It aims to be an accident-free industry. Steel is the most
innovative, recyclable and sustainable material of the 21st century.

A sustainable steel industry in a sustainable world.

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 BIBLIOGRAPHY

• Ministry of Steel, GOI.

• Ministry of Commerce & Industry, GOI.

• Reports & Publications of UNCTAD, IMF, World Bank.

• Indian Council for Research on International Relations.

• World Steel Association.

• The Japan Iron & Steel Federation.

• Websites

• Export Promotion Councils.

• Annual Reports of ArcelorMittal, Nippon, Baosteel, Posco.

• Annual Reports of TATA Steel, Essar Steel, Ispat Industries, JSW.

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