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The global steel industry is inching forward. An<br />
industry, which was characterized as Sunset industry<br />
two decades ago, is experiencing a vast change in<br />
scenario. World Crude steel production achieving a<br />
growth of 8.85% in 2006 over 2005. Major share<br />
coming from Asian continent, China and India being<br />
the major contributor achieved a substantial growth<br />
of 17.7% and 15.5% respectively.<br />
CRUDE STEEL PRODUCTION (million tones) &<br />
GROWTH RATE – (WORLD vis-à-vis INDIA)<br />
GAS BASED SPONGE IRON<br />
Can India expect any growth in the future in this Sector?<br />
PRAKASH TATIA-Vice President (Marketing) VIKRAM ISPAT, Bombay<br />
Average Per capita consumption of steel in world<br />
was around 189 Kgs in year 2005. However in India<br />
it was still 37.6 Kgs during the same year.<br />
PER CAPITA CONSUMPTION (IN KGS)<br />
From the above, It is noted that there is a huge<br />
untapped potential present in Indian market. Now<br />
the trend is changing from past couple of years, with<br />
consistent growth in Economy, huge investments<br />
coming from Domestic and International players in<br />
Infrastructure & development, Automobile sector,<br />
Industrial engineering, Oil & Gas sector thereby<br />
increasing the demand of steel in India. Hence, Steel<br />
Industry in India is entering a rapid growth phase.<br />
With such huge demand it is also expected<br />
production of steel would be triple by 2020 around<br />
110 MMT.Infact, now analysts are talking about more<br />
than 200MMT production by 2020. Growth in various<br />
sectors like Construction, Automobile & Engg is the<br />
main driving force behind such growth and with<br />
number of players increasing in each sector, Every<br />
player is looking to differentiate its product yet being<br />
cost competitive which is ultimately driving the<br />
demand for quality steel in the market. This demand<br />
for quality and various grades of steel by end users<br />
segments is forcing Steel manufacturers to opt for<br />
the best possible route for steel making.<br />
CRUDE STEEL IS PRODUCED IN INDIA BY TWO<br />
ROUTES<br />
Primary Route (CAGR of 3.9% (FY 94-06)<br />
Secondary Route (CAGR of 11.10% (FY 94-06)<br />
As per MIDREX Secondary Steel making process<br />
continues to grow because of its capital and<br />
operating cost advantage, flexibility for<br />
manufacturing various grades of steel, Relatively<br />
Environment friendly and Economies of scale. A large<br />
growth in world steel industry will be via Secondary<br />
route. This growth results in increased demand for<br />
metallic required for Secondary steel making route<br />
i.e. Scrap, DRI, HBI, and Pig Iron. However Since<br />
Scrap is not a manufactured commodity, there are<br />
limitations on growth in supply (especially Quality<br />
Scrap) and Pig iron having its limitation of usage in<br />
secondary route. Given these limitations, Sponge<br />
Iron (DRI/HBI) becomes the most preferred metallic<br />
MAY-<strong>2007</strong>/11
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