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OVERVIEW | OPPORTUNITIES
Metals:
Steel &
Aluminium
OVERVIEW
SIZE
- India is among the top 10 global producers of aluminium and steel in the world
- Produced 49.4 million tonnes of finished carbon steel in 2006-07
- The second largest producer of sponge iron in the world
- India consumed 1.2 million tonnes of aluminium in 2006-07, a rise of 11% over 2005-06
- India accounted for 2.5% of world’s refined copper consumption in 2006-07; Indian demand for copper is expected to grow at 9.5% in the next 2 years
STRUCTURE
- The industry is dominated by large integrated players like SAIL and Tata Steel in steel and Hindalco and Nalco in aluminium
- The public sector has a significant presence in most metal industries
- Steel Authority of India Ltd. (SAIL) has 32% of India’s installed capacity of
crude steel
- Nalco has 38% of India’s installed capacity of aluminium
- Tata Steel, Hindalco and Sterlite are the major private players
- Recent international acquisitions by Indian companies include Tata Steel’s takeover of Corus (2006) and Hindalco’s takeover of Novelis (2007)
POLICY
- 100% FDI is allowed under the automatic route for metallurgy and processing
of all metals
- National Steel Policy – 2005 aims to increase annual production of steel to 100 million tonnes annually by 2019-20 at a compounded annual growth of 7.3%
| Metal |
Key End
Use Sectors |
Key Players |
Revenues
2006–07
(US$ million) |
Promoters |
| Steel |
Infrastructure and Automotive
(long and flat products) |
• SAIL
• Tata Steel |
8,313
4,256 |
- Public Sector
- Tata Group |
| Copper |
Electronics
and Telecom (51%) |
•
Sterlite Industries
• Hindustan Copper |
2,857
223 |
- Sterlite
Group
- Public Sector |
| Aluminium |
Electricity
and Transportation (50%) |
•
Hindalco
• Nalco |
4,412
1,452 |
- AV Birla
Group
- Public Sector |
Source: Capitaline
OPPORTUNITY
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India offers tremendous
opportunities for integrated metal manufacturers
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OUTLOOK
- India has the potential to be among the world’s top 5 producers and markets for aluminium and steel
- Domestic steel consumption is expected to grow by 8% p.a. to 60 million tonnes by 2010
- Aluminium demand is expected to grow at a CAGR of 9% till
2010-11
- India’s per capita consumption of metals is projected to increase substantially in the future
- Low per capita consumption today: 30 kg. of steel as compared to an average 150 kg. globally; 0.6 kg. of aluminium as compared to 3–4 kg. in other developing countries
POTENTIAL
- India is one of the lowest cost producers of steel, alumina and aluminium
- India presents large investment opportunities across the value chain:
- Integrated steel, copper and aluminium plants
- Recycling plants for secondary aluminium
- Booming automotive and infrastructure sectors are likely to drive future demand for steel
- Currently only 5% of steel is routed through Steel Servicing Centres; likely to increase to 35% by 2012
- Large integrated international metal manufacturers including Mittal Steel and Dubai Aluminium have announced plans for setting up plants in India
- POSCO’s proposed US$12 billion investment in the mineral rich state of Orissa could be India’s largest FDI till date
- Investments of over US$30 billion in steel and about $20 billion in aluminium are in the pipeline over the next 5 years
For additional information:
Ministry of Mines, Ministry of Steel (http://mines.nic.in,
http://steel.nic.in)
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