• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
Download
 
AN ASSIGNMENTONBUSINESS POLICY & STRATEGIC MANAGEMENT
SUBMITTED TO: SUBMITTED BY:Dr.FRANCIS CHERUNILAM LINO LAWRENCES4 MBAAIM
 
INTRODUCTION
Steel is crucial to the development of any modern economy and is considered to be the backbone of human civilisation. The level of per capita consumption of steel is treated asan important index of the level of socioeconomic development and living standards of the people in any country. It is a product of a large and technologically complex industryhaving strong forward and backward linkages in terms of material flows and incomegeneration. All major industrial economies are characterised by the existence of a strongsteel industry and the growth of many of these economies has been largely shaped by thestrength of their steel industries in their initial stages of development.Steel industry was in the vanguard in the liberalisation of the industrial sector and hasmade rapid strides since then. The new Greenfield plants represent the latest intechnology. Output has increased, the industry has moved up i n the value chain andexports have raised consequent to a greater integration with the global economy. The new plants have also brought about a greater regional dispersion easing the domestic supply position notably in the western region. At the same time, the domestic steel industry facesnew challenges. Some of these relate to the trade barriers in developed markets andcertain structural problems of the domestic industry notably due to the high cost of commissioning of new projects. The domestic demand too has not improved tosignificant levels. The litmus test of the steel industry will be to surmount thesedifficulties and remain globally competitive.It has been observed that steel industry has grown tremendously in the last one and a half decade with a strong financial condition. The increasing need of steel by the developingcountries for its infrastructural projects has pushed the companies in this industry near their operative capacity.
INDUSTRY OVERVIEW
Steel is the world’s third largest commodity market with a dollar value in excess of $700 billion. In recent years, the industry has undergone radical restructuring and has becomemore global, more efficient and more financially viable. Events have resulted in high
 
 prices, supply disruptions and increased volatility, all elements which the existence of futures contracts can help the industry to manage.Exceptional growth continues to be seen in the global consumption of finished steel products. Growth in steel demand is highest in the developing world. China has increasedits domestic consumption from 53 million tonnes in 1990 to nearly 350 million tonnes in2005.Economic growth in the developing world tends to be more steel intensive than growth indeveloped nations. As a result, steel plays a vital role in these new economies.World steel trade has expanded as global consumption has increased. In 1990international steel trade was 167 million tonnes and is forecast to grow to 353 million in2015.Global steel production has continued to increase but, at a lesser rate to previousyears. In 2005, the total world crude steel production was 1,107.2 million metric tonsand was valued at over $700 billion. This growth is estimated to continue until 2015 at arate of approximately 4% per year. Previously from 1990 to 2000, the growth rate wasonly 1.6% per year.
THE GLOBAL STEEL INDUSTRY
The current global steel industry is in its best position in comparing to last decades. The price has been rising continuously. The demand expectations for steel products arerapidly growing for coming years. The shares of steel industries are also in a high pace.The steel industry is enjoying its 6th consecutive years of growth in supply and demand.And there is many more merger and acquisitions which overall buoyed the industry andshowed some good results. The subprime crisis has lead to the recession in economy of different countries, which may lead to have a negative effect on whole steel industry incoming years. However steel production and consumption will be supported bycontinuous economic growth.The most significant growth that can be seen in the steel industry has been observedduring the two decades that is 1960s and 1970s, when the consumption of steel aroundthe whole world doubled. Between these years, the rate at which the steel industry grewhas been recorded to be 5.5 %. In late 70s the industry showed a deceleration in growth.
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...