1. NCRD Sterling Institute Of Management & studies
A
PROJECT REPORT
ON
STEEL INDUSTRY
submitted by:
submitted to
prof. Seema Laddha
Deepak R Gorad
Sachin Thete
Sanddep Ramraje
Ganesh Shirsat
Girish Suvarna

2. Vision:
“DSG STEEL will be a powerful global business group that continuously provides world
class products and most comprehensive services that ameliorate the lifestyle of the people”.
DSG STEEL is inspired in achieving the vision statement through implementing the
following values:
 We believe in working together as a team in achieving success;
 We are determined to grow as individuals in the working environment as well as improving
personal well-being;
 We are inspired through a behavior code;
 We believe the market values also in our working behavior and in our way we treat other
people;
 We strive for a positive working climate in order to motivate and inspire individuals; 
We strive for an individual internal locus of control;
 We believe in participative management

3. Mission:
 To introduce the latest and most advanced concepts in the construction area, starting
with the idea of adopting a new concept in the fit-out and interior decoration.
 To enhance the interior and fit-out industry by providing all possible solutions and
expertise to projects.
 To exceed our customers need and expectations by delivering the highest quality
products and best service available.
 To provide our employees with all support necessary to bring out the best in them and
to their fullest potential.
 To create team work concept.
Mission Statement

4. Michael porter’s five force model
For Steel Industry
Bargaining power of
Supply
Buyer
Bargaining power of
Suppliers
Competitive rivalry
Threat of substitutes
Steel Industry
Threats of new entry
Supply With trade barriers having been lowered over the years, imports play an
important role in the domestic markets.
Demand The demand is derived from sectors that include infrastructure, consumer
durables and automobiles.
Barriers to entry High capital cost, technology.
Bargaining power of The government can increase railway freight cost and grid power cost. This in
suppliers turn will determine the final price of metal.
Bargaining power of High presence of large numbers of suppliers and access to global market.
customers
Competition High presence of large number of players in the unrecognized sector.

5. SWOT Analysis -
•availabilty of iron ore & coa
•low labour wage rates
•abundance of manpower
•mature production base
•unexplored rural market
•growing domestic
demand
•exports
strength weakness
opportunity threat
•unscientific mining
ow productivity
ooking coal import
ependence
ow R&D investment
high cost of debt
nadequate infrastructure
na becoming superior as
exporter
tectionism in west
mping by competitors

6. Indian Steel Industry
1. Industry Perspective:
India's Steel Industry has a history of more than a century. Before the
liberalization, the Indian steel industry was a predominantly synchronized one
with the public sector industry. Tata Steel was the only major private player
involved in the production of steel. SAIL and Tata Steel have been the major steel
industries of India. The liberalization of the India economy directed to the opening
up of many steel industries, consequently, increased production capacity. Since
1990, a huge investment has been made into the industry.
From 1997 to 2001 when the overall global steel industry was facing a
depression, Indian Steel Industry also went through a rough phase but improved
after 2002. India has now emerged as one of the largest producers of steel in the
entire world. Almost all varieties of steel are now being produced in the country.
India has also emerged as a net exporter of steel and Indian steel is being
increasingly accepted in the global market.
1.1 Size of Industry
PSU Net worth(31.03.2005) Net worth(31.12.2010)
SAIL 10011.00 36115.00
RINL 6878.00 13266.00
NMDC 2568.77 18601.00
MOIL 257.26 2011.19
MSTC 154.96 450.00
KIOCL 1846.69 1960.84
MECON (-) 234.76 173.23
3

7. Indian Steel Industry
1.2 Employment:
The total employment in the industry is more than two million (including
direct and indirect employment). Most of the Steel plants are situated in
economically backward regions of the country. Therefore, Steel companies have
contributed to the overall development of civic, medical, educational and other
facilities in these regions.
Since non-executives recruitments are carried out mainly on regional level,
a large number of SCs/STs and other weaker section of the society get the benefit
of employment in SAIL. For jobs of temporary & intermittent nature, generally
contractors deploy workmen from the local areas, which again provide an
opportunity for employment of local candidates of economically weaker section.
Establishment of steel plants in economically backward areas has given a fillip to the
economic activities thus benefiting the support population providing different types
of services. Over the years, a large group of ancillary industries has also
developed in the vicinity of Steel Plants. This has created opportunities for local
unemployed persons for jobs and development of entrepreneurship.
PSU No. Of
employees(31.12.2010)
SAIL 113403
RINL 17900
NMDC 5902
MOIL Ltd 6676
MECON 1851
KIOCL 1349
1.3 Growth over the years
The steel industry of India has seen tremendous but a steady growth,
backed by many initiatives taken by Indian Government. The crude steel of India
will grow at an annual rate (CAGR) of more than 10 percent during 2010 - 2013.
Additional initiatives taken by Government, is proving to be helpful to boost
economic growth, by injecting various funds in industry such as Infrastructure,
Construction, Power and Automobiles. This growth impetus will definitely cater
future growth of Indian steel industry. The prospective growth of the Indian steel
industry not only attracts Domestic capital, but numerous other foreign global
steel players have been planning to invest the market or have announced their
4

8. Indian Steel Industry
expansion plans. For example, AreclorMIttal & POSCO have planned mega
Greenfield projects at many locations of India. Additionally few other global
players have entered into strategic partnerships or joint ventures with the Indian
Steel majors to capitalize on existing on the existing client base in the region.
Global Perceptive: Steel Industry is a booming industry in the whole world.
The increasing demand for it was mainly generated by the development projects
that have been going on along the world, especially the infrastructural works and
real estate projects that has been on the boom around the developing countries.
Steel Industry was recently dominated by the US but this picture is changing with
a rapid pace with the Indian steel companies on an acquisition spree.
1.4 Acquisition over the years
The steel industry has seen major acquisitions over the years and profound
the status of one of the most dynamic industry in the world. Mittal Steel, has
acquired World’s largest Steel company Arcelor Steel to become the world’s largest
producer of steel named Arcelor-Mittal. TATA Steel has acquired the world’s fifth
largest company, Corus, with ever highest steel price. The increasing needs of steel by
the developing countries for its infrastructural projects have pushed the
companies in this industry near their operative capacity. World steel industry is in
booming phase where Mergers and Acquisitions are going on all around the world.
Thus the present Global scenario suggests that the OECD Countries do not have
their monopoly in Steel Market.
1.5 Major Players in the Industry
Steel industry was mostly dominated by Public sector before liberalization in
1991. But liberalization gives a new life to the industry. It allows new private
players to enter in the market and encourages existing players to expand their
capacity. This eventually brings competition in the market. Presently India is the 5th
largest producer of crude steel in the world and is expected to become the 2nd largest
producer by 2015-16.
Production of crude steel (in Mn tonnes):
Public Sector 16.714
Private Sector 48.161
Total 64.875
Percentage share of Public sector 26%
5

9. Indian Steel Industry
Production of sponge iron (in Mn tonnes):
Coal based 15.52
Gas based 4.48
Total 20
Public sector players:
Steel Authority of India Ltd(SAIL) -- market leader public sector company in
the sector
Rashtriya Ispat Nigam Ltd. (RINL)
NMDC Ltd.
MIOL Ltd
MSTC Ltd
Hindustan Steelworks Construction Ltd. (HSCL)
KIOCL Ltd
Bird Group Of Companies (BGC)
Private sector Player:
TATA Steel Ltd. - Private sector market leader
ESSAR Steel Ltd.
MUKAND LTD.
Sun flag Iron & Steel Co. Ltd.
JSW Steel
Bhushan Steel Ltd.
1.6 Foreign Player in Indian market:
Recently, the steel industry is receiving significant foreign investments such
as POSCO—South Korean steel producer—and ArcelorMittal Group—UK/Europe
based steel producer—announcing plans for establishing about 12 MT production
units each in India. But clearance from Environment ministry is delaying in the
process. Such competition in market increases the production capacity of sector.
Growth in infrastructure sector is also having an increasing effect on demand of
steel. Such competition will help India to become market leader in world and may
help to become a net steel export country.
6

10. Indian Steel Industry
1.7 Commodity prices of Steel movement:
Commodity Futures markets are prominent parts of the global financial
economy. Futures trading have been an important agency in the way the financial
economy has grown to its contemporary form. My role in the project includes
investigating the role of commodity futures markets in the financial economy and
discusses its theoretical understanding in light of the trading practices in these
futures markets. The focus of our research has been maintained on steel futures
traded on a commodity exchange.
The result of the limited research that has been done in the short duration
of 1 month brings forth the uncertainty of investor behavior and challenges the
market oriented idea of rational investors as proposed by the theory of futures
trading.
Our research focuses on the importance of commodity futures markets and
the role they play in commodity price stabilization. The proponents of futures
markets argue about the importance of futures markets based on the factors like
price discovery and price stability. Price discovery and price stability parameters
are only partly true in any given derivative market and, therefore, show the
weakness in the theoretical argument in favour of commodity futures markets.
Derivative trading in steel has been chosen as the commodity futures in focus due to
the inherent steel price instability and its latest introduction as a commodity to be
traded on the futures market.
Steel demand has been growing continuously in the developing economies
and any sudden price fluctuations creates detrimental effects in the production
process within these economies, as they heavily depend on steel for infrastructural
growth. So, steel futures might create a condition of further price fluctuations due to
speculative activity and thus can prove to be harmful for the producers and
consumers of the emerging economies. These producers and consumers lack the
capability to accommodate with the problems of over-production and sudden
price rise, impacting the aggregate demand and supply which often has been
observed to be imbalanced.
1.8 Dumping:
Many nations are accused of this ‘heinous crime’ on a day to day basis.
Though legally speaking ‘dumping’ is not a ‘crime’ as per WTO, which surely does
not encourage it but at the same time permits this activity. Things get stranger
when China comes into picture.
7