The Indian Iron and Steel industry has witnessed a sea of changes over
the years with respect to technology and innovation, business strategy and
other related issues. However, some significant issues have cropped up during
the recent times related to the non-availability of key raw materials (iron
ore, coking coal) and hence, there is a sharp rise in price of finished steel
and a shortage in supply.
Moreover, high input costs and non-availability of raw materials after
the blanket ban on iron ore mining in Karnataka is expected to bring down the
profitability of steel/sponge iron companies in Karnataka & nearby
locations. Iron ore procurement through eauction is resulting in under
utilization of their installed capacities; as eauction does not guarantees iron
ore quality & quantity procured. This scenario is expected to have a
negative impact on the total finished steel output in the medium term.
Profitability margins of the steel/sponge iron companies (operating
out of Karnataka/nearby clusters) is expected to spiral downwards due to
increased procurement costs and resultant lower capacity utilization due to
non-availability of iron ore
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