Steel industry – analysis of major contributors of manufacturing output
Posted: Dec 17, 2019
The steel manufacturing sector is rapidly extending its worldwide demand for steel continues to rise along with its myriad of industrial and commercial uses. As a result, many investors and entrepreneurs have set their sights on this industry. While manufacturing steel components might seem like an oversaturated market with plenty of established players, there’s still room for innovation and competition due to advancements in metal manufacturing technology.
Self-driving vehicles will introduce a new kind of freedom both for the driver and its occupants. Vehicles will no longer be designed around the driver but designed to serve the needs and comfort of the occupants.
With the rise of mobility services such as Uber, Didi, and a host of others, it will become more and more appealing to subscribe to a monthly ride share service for all transportation needs instead of owning a vehicle.
In this new interconnected world, will steel still continue to be the material of choice? To answer this question let’s take a moment to look at why steel should gain favor with car owners, manufacturers and designers.In the year 2018, the world crude steel production reached 1808 million tons which is 7% more than that in 2017. The finished steel production accounts to 1712 million ton in 2018 from 1587 million ton in 2017. Details as given below;
China is the world largest crude steel producer in 2018, followed by India, Japan and the US. The following figure depicts the total market share in Crude and finished steel.
India is the second largest steel manufacture in World, with a total finished steel production accounts to 126.85 MT (million tons) in 2018 from 58.9 MT in 2008. The steel sector has been a major contributor to the country’s manufacturing output.
The availability of low-cost labor and presence of abundant iron ore reserves make India competitive in global set up. The steel sector contributes to 2% of GDP, and it employs 5 lakh people directly and 25 lakh people indirectly. The per capita consumption of steel grew at a CAGR of 3.96% from 45 KG in 2008 to 69KG in 2019. India is also largest producer of sponge iron or DRI in the world, the coal-based route accounted for 79% of total sponge iron production (30.51 mt) in the country in 2017-18.
The finished steel consumption in India will increase by 230MT by 2030-31 from 90.68 MT in 2018 mostly due to the growing in demand in the domestic market. National steel policy -2017 has been implemented to encourage the industry to reach the global benchmark and allowing 100% FDI in steel sector under automatic route. An export duty if 30% has been imposed on iron ore to increase the steel production in the state. Currently there is 18% GST applicable on steel and there is no export duty on steel items.
The public sector company SAIL dominates the steel sector in India. It accounts for around 11.40% market share in finished steel product and 14.59% in crude steel product in 2017. Tata steel accounted for 11.46% in finished steel production and 12.46% of the crude steel production.
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