Wednesday, May 04,
India is slowly becoming a home to many global steel makers who are set to establish their mega green field projects in various parts of the country.*
RAW MATERIAL AVAILABILITY
The ample availability of raw material especially iron ore fines which is still majorly exported from India, has attracted major steel makers to put up their plants in India.
Recently, South Korean steel maker POSCO got the environmental clearance to start its operations in India. And, other major steel projects that are on pipeline include Japan’s Kobe Steel & Nippon Steel who will set up plants in joint venture with SAIL and Tata Steel.
According to Ernst & Young’s report, Global steel 2010 trends, 2011 outlook, released today, “India’s booming economy is driving at a 12 per cent rise in domestic steel demand in the next two years alone, India is poised to become a dominant player in the global steel sector and therefore increasing the production capacity in the country will be benefited from large amounts of iron ore reserves in the country as well.”
SURVIVAL OF THE FITTEST
Ernst & Young’s global mining & metals leader, Mike Elliott said the increased global steelmaking capacity from the investment boom in India will combine with higher raw material costs to squeeze the margins of steelmakers around the world.
“The next few years will be survival of the fittest for steel producers,” he said.
“The higher cost producers will be the ones who won’t be able to operate in an environment where more efficient production is coming in that is lowering the relative production costs.’
Leave a Reply