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Jayant Acharya, Director (Commercial & Marketing), JSW Steel Ltd
K Ranganath, former CMD, KIOCL
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Dear Readers,
The year began on a positive note for the Indian
steel industry. India’s rank in the world order of
steel production remained unchanged at fourth
with an output of 76.7 million tons, despite logging
the highest growth of 4.2 percent among major
producing nations in 2012. There was no change in the top three slots
with China, Japan and the US retaining their positions in respective
order. India was the world’s fourth largest steel maker in 2011 and 2010
as well with a total production of 73.6 mt steel and 69 mt respectively.
The country had clinched the third spot in 2009, but lost out to the
US since 2010.
Does this signal anything for the industry? It surely does. It shows
that even though India’s steel industry is faced with numerous hurdles
such as sluggish demand, raw material shortages, inflow of capital,
infrastructure and land acquisition, it is set to become a powerhouse.
The pattern of steel demand would continue to change and
manufacturers who are able to roll out value-added products could see
their revenues improving. For instance, the product mix demand from
different sectors such as automobiles or real estate would vary. New
grades of steel and customised products would see more takers.
According to analysts, though there could be supply constraints in
India in 2013, steel prices are likely to remain under pressure due to a
steady stream of imports. Currently, India imports nearly 7-10 million
tons of finished steel. Meanwhile, the green field projects in the
country continue to encounter obstacles. Therefore, steel companies
are looking into brown field expansion. The global capacity utilisation
for steel mills is below 80 percent. However, it is more than 90 percent
for India.
The big news is that India is set to get a new steel policy in a
month. The policy is expected to iron out issues related to foreign direct
investments, land acquisitions and environment clearances. The draft
has been circulated for final comments and it would be announced
soon. The policy is also trusted to throw light on solutions to problems
plaguing the sector.
While dwelling on these various developments, in this edition
of Steel Insights, we particularly focus on the foundry industry and
examine how it is gearing up to meet challenges. Also, there is a
special feature on coking coal and met coke which delves on India’s
requirement for the key inputs and supply constraints going forward.
Happy reading!
(Rakesh Dubey)
Letter to
the Edito
Dear Mr Rakesh r
Thanks for your continuous updation of Steel World through your
magazine Steel Insights. The Magazine has helped us  to take informed
decisions & improve our knowledge. I am delighted to receive your
magazine regularly.
Regards
Sushanta Ganguli
Chief Sales Manager ( East), Tata Steel Ltd
Steel Insights, February 2013 3
Contents

6  |  Cover Story
2 0 Green energy solutions need of the hour
34 Steel consuming sectors maintain
sluggish growth Foundry sector needs to focus on
36 Indian iron ore imports set to rise over sustainable growth
time India can tap global casting demand
39 Auto industry posts marginal growth in estimated at 110 mt and growing at 5-10%.
December
40 India ranks top in production growth
42 JSW expects steel demand to grow in
26  |  INTERVIEW
2013-14 Tech upgradation need of the hour
44 Mining impasse hits Sesa Goa profits at HEC: Misra
HEC is planning to invest `750 crore for
45 Gujarat NRE reports higher Q3 profit
next four years on upgradation process.
despite sharp fall in met coke prices

29  |  INTERVIEW
47 SAIL April-Dec steel production rise
marginally
48 Tata Steel annualized crude steel
production likely at 8.35 mt in 2012-13
Iron ore an area of concern: Sandvik
In India, revenue is approx. 20 percent below
49 RINL lights up ignition furnace at Sinter target on iron ore mining ban, lack of new
Plant No 3 projects.
50 Wining combination in flat products
equipment
55 BSP gets new Skin Pass Mill 30  |  SPECIAL FEATURE
56 Industry pins hopes on steel demand India examines options as Chinese
growth demand chart coking, coke trend
57 Iron ore handling by major ports down By 2016-17, coking coal demand is
expected at around 90.2 mt and import
54.5% y-o-y in Apr-Dec
would more than double.
58 Railways iron ore handling up 13%

38  |  FEATURE
m-o-m in Dec
59 Macroeconomic indicators of India
60 Global crude steel production rises y-o-y Proactive budget needed to solve
in 2012 issues: Nerurkar
61 Domestic flat & long markets Duty on steel grade limestone, dolomite and
iron ore should be reduced to zero
62 Domestic raw materials

Call 9163348243 for

more details

4 Steel Insights, February 2013

 Cover Story

T
he Indian foundry industry has indeed come a long
way since the time metal castings as an industry started
in the later part of 19th century. Since then, the Indian
foundry industry has been successfully facing the challenges of
producing high precision and high quality castings conforming
to international standards. In spite of that, experts feel that the
industry has a long way to go in order to establish itself as
the best castings producer in the world in terms of quality,
quantity, delivery and price.

Foundry sector
needs to focus on
sustainable growth
Tamajit Pain

6 Steel Insights, February 2013

Cover Story
World foundry industry
The Census 2011-12 conducted by Modern
Casting, USA, reported that the global casting
production in the year is 98.59 million tons
(mt) of iron, steel and non-ferrous castings.
The output has been contributed by nearly
49,391 foundries from 33 countries.
However, considering the unlisted
foundries, the number of operating foundries
globally will be approximately 55,000
and world casting production would be
approximately 105 mt. On examining the
nature of castings produced the world over, it
can be seen that approximately 48 percent of
the total casting production consists of grey
cast iron products, 25 percent ductile iron,
1 percent malleable iron, 10 percent steel
castings and 16 percent non-ferrous castings.
Out of the total production, China
produced 41.26 mt in 2011-12, while India
produced 9.99 mt of castings. Therefore, the
countries ahead of India are China and USA
(10.00 mt). According to industry experts,
Asia’s casting production is approximately
67.5 percent of the world casting production.
The Asian countries primarily under
consideration are China, India, Japan, Korea,
Taiwan, Pakistan, Malaysia and others.
The new emerging castings producing
countries are UAE, Saudi Arabia, Bahrain
and Muscat.
An evaluation of the achievements shows
that China and India have increased their
production by nearly 30 percent in the last
8 Steel Insights, February 2013
World casting production, product-wise (million tons)
Year Grey Iron Ductile Iron Malleable Iron
2009-10 37.62 19.94 1.04
2010-11 43.26 23.45 1.1
2011-12 45.87 24.78 1.38
Source: The Institute of Indian Foundrymen
five years, while USA’s and Japan’s annual
production have come down by 15 percent
and 6 percent respectively in the last five
years.
This shows that Germany with 8,933
tons production during 2011-12 is on the
top and China with 1,375 tons production is
at the bottom, while India with 2,221 tons
production is in between in the production
curve.
Indian foundry industry
India has over 4,500 foundries and several
others in the small and medium and large
scale sector. A number of modern foundries
with state-of-the-art facilities have come up
in recent times.
According to industry estimates, the
annual turnover in India of all the foundries
put together has reached a figure of around
`60,000 crore. The installed capacity is
estimated to be 15 mt and capacity utilisation
is approximately 60 percent. It is expected
that casting production in India will touch
15 mt in the next three years and 20 mt in
the subsequent five years.
Steel Non-Ferrous Total
9.03 12.71 80.34
10.22 13.64 91.67
10.34 16.22 98.59
The present employment in Indian
foundries is approximately 2 million people
directly and indirectly and additional
manpower needed for every million ton of
production is approximately 2 lakh, directly
and indirectly.
An analysis of the Indian casting
production shows that in the last seven years,
production has doubled. However, because
of recession, the production had dropped by
11.98 percent in 2008-09 compared to the
previous year. But the situation has reversed.
In 2011-12, production has increased by
10.43 percent compared to the previous year.
Strong points
The strengths of the Indian foundry industry
lie in the fact that it has a large base which
is spread all over the country. India has
a traditional legacy of metal casting and
manpower is available at a reasonable cost.
The industry is now making efforts to train
them and retain them, industry officials said.
Another advantage is that of access to
latest technology and support by various
government bodies and availability of vast
natural resources. Indian foundries are
successfully facing the challenges of producing
high precision and high quality castings
conforming to international standards.
Moreover, the country has a large
transportation and railway network and there
is an expectation of 50 to 60 percent increase
in offloading of cast components by major
developed countries of the world.
Major constraints
The continued rise in prices of important
raw materials like pig iron, steel scrap, low
ash coke, ferro alloys and other material have
crippled the industry. The foundry industry
is under tremendous pressure but seem to be
working individually to face the situation. In
the last seven years, the price of major raw
materials started increasing substantially
from November 2007 and reached a peak in
September 2008.
Cover Story

Production highlights of world’s 10

top casting producing nations
Country 2010-11 2011-12
China 39.6 41.26
USA 8.24 10
India 9.05 9.99
Japan 4.76 5.47
Germany 4.79 5.46
Russia 4.2 4.3
Brazil 3.24 3.34
Korea 2.23 2.34
Italy 1.97 2.21
France 1.96 2.05
Rest countries 11.63 12.17
Total 91.67 98.59
Source: The Institute of Indian Foundrymen

From then it came down substantially

under the influence of recession and currently
prices are on an increasing trend.
However, the industry had fixed price
long term contracts without any escalation India’s casting production, product-wise (million tons)
clause. Added to this is the problem of old
Year Grey iron Ductile iron Malleable iron
equipment and technology, especially in the
small scale sector. 2009-10 5.05 0.8 0.06
Industry experts say the Indian foundry 2010-11 6.18 0.984 0.069
industry is a case of inverse relationship 2011-12 6.79 1.09 0.06
between technological sophistication in
Source: The Institute of Indian Foundrymen
terms of scientific inputs in molding, melting,
and mechanisation and the number of firms
adopting such systems. In the last decade, The ferrous foundry industry is highly
a lot of work has been done on introducing energy intensive. Energy cost is almost 15-20
new processes and using them to the percent of the manufacturing cost and cost of
maximum possible advantage. However, the energy in India is very high in comparison
corresponding growth in the production and to other countries. This factor wipes out
supply of critical equipment has not taken competitiveness of the sector not only in the
place internally. It is essential to encourage export front but also in the domestic front.
manufacturers of critical equipment to locate
their units in India to tap the huge export Automation
market that is building up. Information technology and automation are
It is to be noted that despite the playing an increasingly important role in
introduction of new processes, over 90 growth of the industry currently and have
percent of the world’s casting production is found a wider range of acceptance in foundry
through green route. industry to tackle technical problems.
The other ailments of the industry are Automation is required because of the
low production per unit, shortage of skilled following factors:
manpower, insufficient research, delay in ♦♦ Increasing labour cost
payment by customers, inability to ensure ♦♦ More process variation due to more
prompt delivery at short notice, shortage human involvement which leads to heavy
of power, high energy cost and higher rejection
import duties of raw materials compared to ♦♦ Customer requirement on quality and
competing countries. delivery is going up
Steel Non-ferrous Total
0.88 0.653 7.44
1.07 0.75 9.05
1.14 0.9 9.99
♦♦ People switching over to other industries
due to favourable working conditions
♦♦ Physical work causing health hazards to
workforce
Thus more and more foundries are using
robots for material handling. It is predicted
that in future robotics based work would
be created to add content and value to the
product.
Green foundry
Foundry operations have significant
environmental impacts both within and
beyond foundry plant. While the primary
focus of metal casting technology is
production of sound casting economically, it
is increasingly necessary to take into account
the effect of the process on the environment
and its communities.
The key to foundry pollution prevention
is to undertake comprehensive examination

10 Steel Insights, February 2013

Cover Story
K
olkata hosted the 61st Indian
Foundry Congress (IFC), an annual
flagship event of the Institute of
Indian Foundrymen (IIF) between January
27-29, on the theme “Building Brand India
- The Casting Edge”. The event was held
concurrent with the International Foundry
Exhibition (IFEX 2013).
With over 800 delegates and 250
exhibiting companies, the 61st Indian
Foundry Congress and IFEX 2013
foundry exhibition drew over 4,000
trade visitors. In addition to technical
presentations by Indian and international
authors, the IFC featured an Energy
and Environment Forum, Student
Forum, Cast Source buyer-seller meet,
prominent industry speakers and a host of
international participants from Germany,
Italy, China, Japan, UK and USA.
Founded in 1950, IIF is an all-India
industry association representing the
foundry sector and comprises foundries,
foundrymen, professors, academicians,
foundry equipment vendors and foundry
input suppliers, with a current strength
of over 3000 members. Headquartered
in Kolkata, with four regional offices in
Kolkata, Delhi, Chennai and Mumbai and
27 chapters across India, IIF is a member
of the World Foundry Organization
(WFO), UK and of the Confederation of
Indian Industry (CII).
Speaking on behalf of the domestic
foundry sector, Harsh K. Jha, president,
IIF said: “The Indian foundry industry
is the second largest producer of castings
in the world with a production of 8 mt
annually, behind China, which is far ahead
at 35 mt. There are more than 4,500
foundries in India of which 85 percent are
small-scale units, 10 percent are medium-
12 Steel Insights, February 2013
61st Indian
Foundry Congress
Steel Insights Bureau
size and 5 percent are large-scale
units. The industry is labour-
intensive, employing 500,000
people directly and 150,000
people indirectly.” The smaller units are
dependent on manual labour but most
medium and large units are partly or fully
mechanized and many larger foundries
meet world-class standards.
Major foundry clusters include
Jalandhar, Ludhiana, Batala, Agra,
Howrah, Pune, Mumbai, Belgaum,
Kolhapur, Solapur, Rajkot, Chennai,
Hyderabad, and Coimbatore. Ravi
Sehgal, chairman of the 61st IFC said:
“Castings produced include ferrous, non-
ferrous, aluminium alloy, graded cast
iron, ductile iron and steel for application
in automobiles, railways, power sector,
pumps, compressors, valves, diesel engines,
cement, electricals, textile machinery,
sanitary pipes and fittings, engineering
industries, machine tools and special
applications. Grey iron castings form the
majority at 68 percent of total castings
produced.”
“The theme for this year’s meet is
‘Building Brand India - The Casting
Edge’. Foundrymen must thus make
an effort to offer the right product mix,
quality and price in order to reach out
to the world. Eastern India has taken up
the challenge to set up new foundries,
and with this the industry is once again
growing in strength in India,” Sehgal said.
Anil Vaswani, joint secretary and
treasurer of the 61st IFC said: “The
mission and vision of IIF is to make
the foundry industry an attractive
proposition for all stakeholders, with
government support, through technology
upgrades, competitiveness, enhancement
of operational efficiency and capital
infusion. The focus is on development of
foundry clusters and common facilities for
foundries.”  for castings in the domestic market is over 6
of the operations in the facility with a goal
of minimising the creation of all types of
foundry waste products. Foundry industry
depends on a range of natural resources which
are consumed during production. Some of
this can be re-circulated within the foundry
plant but portion is lost in the surroundings
both within the plant and outside.
Environment impact caused by the foundry
industry due to emission of air, release of
water, contamination of land and other local
environmental and community issues need to
be analyzed thoroughly and preventive action
needs to be taken in this regard.
All foundries should work for a
‘green foundry’ concept. Minimization of
emissions, efficient use of raw materials
and energy, optimum utilisation of the
process, recovering and recycling of the
waste materials and substitution of harmful
material are important facets of adopting
green foundry techniques.
For foundries, focal points are air
emissions, efficient use of raw materials
and energy, waste reduction along with any
recycling and re-use options.
The best available technique needs to be
used in order to optimise the management
and control of internal flaws to prevent
pollution. Also there is need to create better
and better techniques for environment
protection.
Castings demand
Demand for castings is ever increasing. The
present day demand for castings globally is
estimated to be about 110 mt with product
value of over $150 billion. With 5-10 percent
of expected growth, the demand for castings
will increase substantially over a period of
time.
The wind energy sector is expected
to grow at 25-30 percent in the coming
years. The additional requirement for
ductile iron castings in the sector alone will
be approximately 1 mt of which India’s
requirement will be 0.08 mt.
India has a stable domestic demand,
which has helped the foundries to survive
the recent global meltdown. The order book
position of most of the foundries who are
equipped to produce quality castings is very
good. India remains a high growth region for
small cars, tractors and two wheelers. Demand
million tons per annum (mtpa) at present.
Cover Story
Industry experts feel that the world is looking
at India as a source for their cast components
and India can tap this opportunity.
At present, the total casting export from
India is over 1 percent of the total world
requirement. If all the foundries put their might,
this share could go up to 10 percent providing
immense opportunity to our foundries.
Rise in buyer expectation
The foundry industry is facing challenges
from industries all over the world. In this
global competition the rule of survival of the
fittest will apply and only the best and the
competent will survive the race.
According to industry experts, the only
criterion for survival is quality, quantity,
delivery and price. For the manufacturers the
message is to tighten their belts and fall in
line quickly or be ready for the fallout.
In the global arena, the buyers’
expectations have also soared sky high and
buyers just expect excellent quality of castings
as and when they need at a lower price. Buyers
also expect continuous improvement. The
castings which were declared ‘ok’ till now are
now being declared substandard and rejected.
14 Steel Insights, February 2013
With every supply the buyers give a list
of improvement expected in the next supply
and current supply may be either rejected or
accepted as a special case. Variable schedules
are also a factor affecting foundries.
Foundry cluster
In both industrialised and developing
countries, there is increasing evidence that
clustering and networking can help small
and medium enterprises to boost their
confidence.
Small scale enterprise clusters are
tools to effectively implement and support
initiatives aimed at enlarging the production
base, conquering market niches, accessing
export markets, triggering growth, offering
employment opportunities and redressing
regional economic imbalances.
There are several successful clusters
functioning in India at Agra, Batala,
Belgaum, Chennai, Coimbatore, Howrah,
Jalandhar, Kolhapur, Ludhiana, Pune and
Rajkot. Foundry clusters and national
cluster for export promotion of cast products
together can bring a lot of comfort to the
industry in coming years.
Benchmarking
According to experts in the industry, there
is an imperative need for benchmarking
of products to improve competitiveness.
Following are the areas where benchmarking
is required:
♦♦ Rejection level
♦♦ Yield
♦♦ Energy consumption
♦♦ Productivity
♦♦ Effective floor utilization
♦♦ Raw material consumption
♦♦ Inventory level management
♦♦ Delivery period
♦♦ Development of lead time
♦♦ Emission level of dust and fumes
♦♦ Generation of wastes
♦♦ Manufacturing costs
Future
The Indian foundry industry is expected to
grow at 10-20 percent per year for the next five
to seven years provided proper government
policies are in place. Domestic and export
demand and increased manufacturing and
outsourcing activities could also take the
industry forward.
A foundry unit in operation
Cover Story
Many industry players believe that based
on the present growth pattern, India will
advance her position shortly as the second
largest casting producer in the world, leaving
behind the USA which is presently in the
second position.
As the demand for good quality castings
increase over time, foundries capable of
producing and supplying castings as per
customer requirement will have a bright
future. However, Indian foundries have to
convince the foreign buyers about their ability
to produce cast products of global standards.
Moreover, to be globally competitive,
Indian foundries have to urgently upgrade
themselves technologically, train manpower
continuously and benchmark with global
standards to produce quality castings and to
create a brand image.
It is expected that there will be ample
scope for Indian foundry operators to forge
alliance with their counterparts in the
developed countries. A feasible approach is
through technology transfer by the foreign
foundry to its Indian counterpart with equity
participation with a view to establishing a
16 Steel Insights, February 2013
manufacturing base in India with 100 percent
buyback arrangement.
The technology transfers and absorption
in such cases would mean transfer of
knowhow, equipment and training of Indian
foundrymen. These alliances would, however,
help abolish middlemen and trading houses
who otherwise import castings at a minimal
price and supply directly to the foreign buyers.
It will help the foundry operators to gain
access to foreign markets with higher margins.
The industry feels that the following
goals need to be taken up by the Indian
foundries to improve their performance:
• To establish India as the Asian hub for
cast components
• To implement schemes to attract and
retain the best manpower available in the
country and abroad
• To accept the challenge of greening the
foundry industry
• To attract latest technologies from all
over the world
• To adhere to delivery standards – quality,
quantity, delivery and price – it is feared
Foundry-men engaged in casting operation
that export of poor quality castings by
some of the smaller manufacturers would
result in poor image of Indian foundries
in export markets.
• Capacity building among smaller
foundries and the ability to meet customer
requirements of machined castings
• Reducing long investment lead times and
delays in environment clearances which
result in project uncertainty.
• Meet cost challenges like increasing cost
of raw materials, power, manpower etc
• To develop competitive overseas market
For achieving the above goals the
industry needs to take into consideration the
following initiatives:
• Indian foundries need to invest more
on R&D on various fields to reduce
production costs and for producing high
quality castings consistently.
• Reduce rejection of castings by mapping
best casting production processing
and refrain from adjusting production
processes without thorough study.
Cover Story

the foundry industry will be very crucial to

support the manufacturing and engineering
IIF signs MoU with Japan Foundry Society industry in the coming years, according to
A.K. Anand, director, The Institute of Indian
Steel Insights Bureau Foundrymen – FIC, New Delhi.

T
The industry will have to focus on
he Indian Institute of Foundrymen (IIF) a pan-India body representing the
sustainable growth and take steps to achieve
foundry sector, has entered into a MoU with the Japan Foundry Society, the
the following targets by 2020 in a phased
largest organization of foundrymen in the world, for Green Business Foundry.
manner:
The MoU was signed at the 61st Indian Foundry Congress which got underway in
♦♦ Production to go up to 25-30 million
Kolkata on January 27. The move will help implement cost-effective and eco-sensitive
tons per annum
‘green’ manufacturing standards across the country’s $12-billion foundry industry.
♦♦ The productivity per unit to go up to
“This comes at a time when a whopping `600 crore worth of investment is expected
4500 tons per annum
to be invested in the foundry industry in West Bengal and the rest of eastern India,” said
♦♦ Productivity per man to go up to 40 tons
Ravi Sehgal, chairman, organising committee of 61st IFC and IFEX 2013.
per annum
The three-day meet, being organised by IIF will have two concurrent events – IFEX
♦♦ Specific energy consumption to go down
2013 and Cast India Expo. It is being attended by over 800 delegates from China,
by 10 percent
Germany, Italy and Japan, which are major hubs of the global foundry industry.
♦♦ Increase share of aluminium casting to 15
“The 61st IFC has a range of programs and informative technical seminars
percent
addressed by reputed speakers, and an internationally attended exhibition of the latest
machines and technology. Also, cast buyers of repute will be visiting to source their
This is possible only by creating additional
annual requirements, and industry representatives will be discussing their perceptions
capacity by improved productivity by using
of the current scenario of the industry,” Harsh K. Jha, president, IIF said.
modern design and manufacturing tools,
With 9.9 mt cast components, India is ranked among the top three globally with
technology and processes and by promoting
annual exports of around $2 billion. However, its share in the global market is below 2
investments in modern plants, according to
percent. 
Anand.
For example, for increasing the scale
of operations the model of China can be
• B enchmark all process parameters based manufacturing in GDP to 25 percent from
taken into consideration. China has 30,000
on best practices in similar units which present 15 percent and to create additional
foundries with average production per unit of
are performing well. 100 million jobs by 2022. 1,400 tons per annum. As per reports, they
• Benchmark pollution norms of the The other significant features are single plan to reduce the number of foundries to
developed countries to ensure minimum window clearance mechanism to cut red tape 10,000 and increase the per unit production
damage to environment and the high priority for skill development. to 5,000 tons per annum, thus closing down
• R&D to target for producing high quality The private sector will be given standard inefficient units.
strategic castings which command high deduction of 150 percent of expenditure for The Indian industry will need to invest
selling prices skill development institutes. an estimated $9-10 billion by 2020 in the
The government has notified 10 National next 10 years for capacity expansion and
• Improve manpower efficiency and
Manufacturing Investment Zones, which are upgradation to support manufacturing.
capabilities and providing education and
mega integrated townships with world class Thus although the foundry industry
training of foundry personnel at all levels
infrastructure. Moreover, the government is is successfully facing the challenges of
• Provide continuous training in modern offering a host of incentives like exemption
technologies producing high precision and quality castings
from capital gains tax and liberalised labour conforming to international standards, it
• There is a need for centralised R&D and environment norms to promote these has a long way to go to achieve the status
centres for foundry clusters with zones. of the best castings producer in the world.
necessary testing facilities and effective Also, the government is closer to Actions taken by the industry has been
participation of foundry experts. implementing the goods and service tax and showing positive results but there is a need
• Increased mechanization, monitoring has set ambitious power generation capacities to pay attention to R&D activities to reduce
and controls for improved productivity in the Twelfth Plan and plans to invest $1 production costs and for producing high
• Value addition by producing ready to use trillion during the Plan period (2012-17) in quality castings consistently.
components/sub-assemblies power and infrastructure. With 9.99 mt of casting production in
2011-12, India has become the third largest
Growth drivers Focus areas castings producer in the world. It is expected
The new National Manufacturing Policy The Indian foundry industry currently that shortly India will become the second
of the government of India approved generates revenue of $12.5 billion and exports largest casting producer in the world next
recently, envisages to increase the share of worth $2 billion. In this context, the role of only to China. 

18 Steel Insights, February 2013

Cover Story
Green energy solutions
need of the hour
Tamajit Pain
I
ndia is emerging as an industrial nation
in the world with significant economic
growth. Metallurgical industries are also
expanding rapidly particularly in primary
metal production providing growth in
economy, needed for a prosperous nation.
Metallurgical industries are known as
hazardous and polluting industries since
they generate huge amount of solid wastes
like slag, tailings, red mud, heavy metals,
anode slimes etc toxic effluents, flue gases,
discharges of thermal emissions and noise are
common with the process.
For example, steel production process
(BF-BOF) is highly energy intensive and
releases about 2.3-3 tons of CO2 per ton
of crude steel. SO2 emission ranges 1.2-
20 Steel Insights, February 2013
1.4 kg per ton while NOX generation is
approximately 1.8-2 kg per ton of crude
steel. Slag and flue dusts are generated as
solid waste which is about 1-1.4 ton per ton
of finished product. Fugitive dust emissions,
ground water contamination and solid waste
disposal are the main problems, according to
industry experts.
This not only affects the flora, fauna,
terrestrial and aquatic ecology but also
health of the population in the vicinity of the
plant. The environmental problems can be
minimized by decreasing the energy use by
undertaking short and long term goals. The
short term goals include conducting energy
audit to know the energy use or loss pattern,
avoiding and reuse of waste energy and
adopting energy efficient technology.
The long term project should involve
development of technology and process in
making effective solutions to the problem
including development of renewable energy
sources for various technical purposes,
efficient technology to have less energy use
and techniques to recover waste heat etc.
Efforts should be made to minimise use
of fossil energy, which is the basic cause of
environmental problems or find out the
possibility of an alternative energy use.
The world metal production and energy
requirements reveal that steel industry
alone requires 8.1 percent share of the total
world energy. The energy use share by five
major metal industries is nearly 10 percent
indicating that metallurgical industries are
the major energy consumers in the world.
Industry sources opine that energy
audit should necessarily be carried out in
metallurgical plants including iron and steel
and aluminium industries to identify quality,
quantity and cost of various energy input
sources, assessment of the current pattern
of energy consumption, identification of
potential areas of energy economy, the energy
waste in the system, fixing targets for energy
saving potential and implementation of
measures for energy conservation.
Energy use
Steel can be produced by using four different
routes and their energy requirements are also
different:
♦♦ B
last furnace – basic oxygen furnace –
continuous casting (BF – BOF – CC)
route
♦♦ D
irect reduction of iron ore - electric
arc furnace – continuous casting (DRI –
EAF – CC) route
♦♦ S
melting reduction – basic oxygen
furnace – continuous casting (SR – BOF
– CC) route
♦♦ E
lectric arc furnace – continuous casting
(EAF – CC) route
BF-BOF-CC route is the oldest method
of making steel and is dependent on a
particular energy source (metallurgical coke)
which has limited supply in the world. 31.1
GJ energy is needed for steel making by the
primary route starting from iron ore. The
actual value of energy consumption can
vary from the best available technique in the
world to 16.7 GJ per ton. The blast furnaces
consume maximum energy (54 percent) of
Cover Story
the total requirement of the process, which
nearly 31 GJ per ton of steel.
Since 1970, efforts are being made to
minimise the coke rate and replace it as far
as possible by other energy sources such as
oil and coal, depending on the availability
and economics and had been decreasing as a
result of substitution by oil and non-coking
coal injections.
To find an alternative for metallurgical
coke, the DRI-EAF-CC route was developed
in 1970s that used non-coking coal or
natural gas as the main energy source for iron
making. The iron thus made was converted
into steel using electric arc furnace. The non-
availability of such large quantity of electrical
energy was restricting the growth of the steel
sector. Both coal and natural gas can also be
used as the primary energy source to produce
DRI using two different technologies. The
coal based DRI plants use 12.6 GJ per ton
energy, while has based plants need only 9.5
GJ per ton for producing sponge iron as the
product.
In case of coal based plants, the unused
energy is more than 70 percent mainly in the
form of waste char and hot gases. The waste
char and hot gases are exploited for power
generation to avoid wastage. The char is
pulverized and fired in boiler to raise steam
to generate power. In case of gas based plants,
the heat loss is much less and further effort is
needed to recover heat from flue gases. The
spent gas is recycled in the system thus reducing
the demand for the fresh energy source.
To become non-dependent on electrical
power which comes from a different industrial
22 Steel Insights, February 2013
sector (power plants) the third route (SR-
BOF-CC) was evolved in 1980. This is the
most recent method of steel making using
non-coking coal and oxygen as the main
energy sources. Many processes under this
group have been developed but only two
technologies (COREX and FINEX) have
reached the commercial stage. The COREX
plant, first in India and third in the world,
was initiated in 1999 at Bellary by JSW. The
commercial FINEX plant is planned to be set
up in India for the first time by Posco near
Paradip in Odisha.
The COREX plant uses non-coking coal
as the energy source along with pure oxygen
to cause combustion and minimize the
nitrogen content in the gas. A typical unit
requires 36.9 GJ energy by consuming 1 ton
of coal and 700 m3 of oxygen to produce 1 ton
of steel and 4700 kWh power. This process
produces two products (steel and power) with
nearly equal energy intensity share. This is
the reason why such plants are called steel
and power plants. The power generated in
excess of its own need is exported to national
grid. The plant technology involves coal
gasification and its use for reducing iron
ore. In this process the excess reducing gas
consisting carbon monoxide is utilized to
generate power.
The fourth route (EAF – CC) is a very
old method of steel making which has gained
importance in the recent times in view of
the energy crisis. This method involves the
melting and casting of steel which requires
less energy. Typical EAF steel melting uses
2.44 GJ of energy to produce 1 ton of steel.
This energy is derived from 410 kWh per
ton electrical power (1.47 GJ) and heat
of oxidation of Carbon (0.56 GJ), silicon,
manganese etc. In addition, 0.16 GJ of
energy is provided by burning some fuel to
preheat the scrap.
Thus energy requirement is different for
four different routes of steel making and use
of energy is different due to technological
changes. However, efforts have been taken
reduce energy consumption in every process.
Energy efficiency
Foundries are energy intensive production
Cover Story
units where adoption of the best energy
solution provides great energy saving
potential.
According to foundry industry officials,
currently foundries are effectively recycling
their materials. More than 90 percent of all
cast parts are made from re-melted scrap
metal.
The costs for energy and materials in
foundries are in average responsible for 40
percent of all costs. Melting and solidifying
metals require a high amount of energy.
Physical laws determine an average energy
input of 2000 kWh per ton of final casting
product. This adds up to a total energy
consumption of 18 billion kWh.
The foundry industry is energy intensive
and has an important role to play from an
environmental point of view while seeking
to develop and play an important role in the
development.
According to industry experts, some
energy efficient processes that need to be
followed include:
24 Steel Insights, February 2013
♦♦ O perate the furnace at its constant rated
power
♦♦ Install an automatic power factor
controller
♦♦ Cooling towers with change of blades
from aluminium to FRP
♦♦ Introduction of low wattage compressor
♦♦ Replacement of partially loaded motors
with smaller capacity motors
♦♦ Use of natural light through the use of
transparent roofing sheets
♦♦ Replacement of high speed diesel fired
burners with furnace oil fired burners
♦♦ Replacement of conventional copper
ballast with HF electronic ballast
♦♦ Replacement of filament indication
lamps in control panels with LED lamps
♦♦ Use of 36 watt slim tubes instead of 40
watt conventional fluorescent tubes
♦♦ Increase emissivity of heat treatment
furnaces by coating the hot face
Green energy
Although efforts have been made to reduce
energy consumption in the past, one has
to solve the ecological problems rooted
with the use of fossil fuels. Therefore,
efforts should be made to find green energy
solutions through hydrogen as a renewable
reductant and energy source for the iron and
steel industry.
According to experts in the field,
hydrogen is an ideal reductant for iron
making since it can be produced without any
undesirable gases in it. The product of the
reduction reaction is water which would be
recycled in the nature without resulting in
any environmental problem. The hydrogen
has been used successfully to produce high
quality iron on a commercial basis in the
world by H-iron techniques.
This method is not used presently in
the normal iron and steel production due
to economic reasons however this may be
possible in future if hydrogen gas in available
in abundance as a renewable energy. It may
also be possible to modify the currently
used gas based process for DRI production
exploiting pellet or lumps in hydrogen,
industry sources said. 
 interview
Tech upgradation need of the
hour at HEC: Misra
Sanjukta Ganguly
H
eavy Engineering
Corporation Ltd (HEC), the
public sector integrated
engineering complex based out of
Ranchi, has been battling the odds
of technological obsolescence and
lack of skilled manpower for some
time now. That has been adversely
impacting the profitability of the
company of late.
In a free-wheeling conversation
with Steel Insights, the chairman
and managing director of HEC, R.
Misra, said that only a successful
technological and infrastructural
upgradation can boost the profit
margins of the company. Plans are
being chalked out accordingly,
he said. He also spoke about the
state of the mining industry and the
present order book of the company.
Excerpts:
What will be HEC’s focus area and plans in
the near future?
We have been making profits for the last six
years, but even that has been very nominal.
Turnover has increased by only one and
half times. Technological obsolescence and
lack of trained manpower are some of the
main reasons for such low profits. We need
younger people with new ideas to carry this
company forward.
Perfection is an important component
of the foundry business. The slightest defect
in casting can get it rejected. That is why
it has now become imperative that the
old plants should be replaced as they have
become obsolete. The machine building
tools and forging plants were set up in the
early 1960s with equipment imported from
the erstwhile USSR and Czechoslovakia.
26 Steel Insights, February 2013
However, following the breaking up of both
the regions, the sourcing of these equipment
has become difficult. Technological
upgradation, however, is now the biggest
need. Without further investment on
upgradation, it is impossible to move
forward.
What is the proposed investment for this
upgradation?
We are currently planning to invest about
`750 crore for the next four years on this
upgradation process. We are not planning
to build any new plant but we want to make
our existing plants energy efficient. We are
consuming about 750 Kilowatt of energy at
present. It can come down roughly to about
600 Kilowatt once upgradation is done.
Are you collaborating with any other
company for this technological
upgradation?
Being a public sector company, we have to
pass through a transparent tendering system
at every stage. We will tie up with whichever
company clears all requirements and comes
through the process.
What is your outstanding order book right
now?
Our outstanding order book right now is
`1,700 crore. However, as we are passing
through a recession now, there is a delay in
placing of new orders. Mainly we are in the
business of supplying equipment to steel
plants and SAIL, for instance, has already
placed its orders for the modernisation
process.
The pace of orders in the mining sector has
also slowed down. Are you expecting any
improvement in the scenario?
We have already submitted tenders against a
lot of requirements by various companies. It
is a fact that the orders are being hampered
owing to the current situation. However, we
are expecting
the business
to improve
marginally in
the coming
fiscal.
Our orders
are usually big
in nature, hence
our business
is hit even if
we miss one of R Misra, Chairman & MD, HEC
them.
We are also in the business of turnkey
projects from designing till commissioning
of projects. So orders also come in from
there.
What is the demand scenario at present?
As far as the demand scenario is concerned,
PSUs are delaying their orders. At the
same time, private sector customers want
to procure the products at a lower cost as
they are in a cost cutting mode. Hence,
it is getting difficult for us to match their
requirements.
Are you focusing on any particular industry
at present for business?
We are looking at the steel plants. The coke
oven batteries, especially, have become very
old and there is a need to change them.
Earlier they used the wet quenching system
but now they need to use dry quenching
system. Batteries also need to be changed.
These usually work for 15 years but they
have already crossed 20 in most of the SAIL
plants. Hence, an immediate change is the
need of the hour.
What are your offerings for the Indian
mining industry?
In the lower range we have 5 m3 shovels and
10 m3 shovels all of which are electrically
operated. So, these require electrical lines
and the cables should be drawn to such
points where these machines are being used.
We are also supplying another big machine
called drag line for overburden removal in
opencast coal mines. The weight of the
machine is about 2,000 tons and the system
costs about `150 crore.
We have received an order from Coal
India Limited for three such walking drag
lines. We have already supplied one and
interview
the rest of the order is being executed. One
machine is about 4-5 storeys high and the
erection of the machine takes about eight
to 10 months. Its length is about 96 metres.
These machines will be deployed mainly in the
northern coalfields in the Singrauli coal mines.
We also have the expertise in supplying
28 Steel Insights, February 2013
overhead cranes to SAIL which can operate
at a very high temperature which can pour
liquid pig iron, liquid steel on a 24-hour
basis. Recently we have supplied three such
cranes of 450-tons capacity to Bokaro Steel
Plant (BSL). Altogether, right now, we have
orders for more than 100 such machines.
Are you getting any orders from abroad?
Recently, we have got an order from
Bangladesh which is under execution at
present. The order is of supplying under
floor wheel lathe to the Bangladesh
Railways. The tool that we will provide is
very sophisticated and can automatically
detect what should be the optimum size of
the wheel plate and can change it once it
gets deformed.
We have the expertise to produce these
kind of machines but we are mainly an
India focused company. This order from
Bangladesh has been our first international
order.
Are you interested in acquiring more
international clients for your products?
Although we are already supplying machines
to the Bangladesh Railways, at the moment
we are just keen on upgrading our plants and
supplying primarily to Indian companies.
We are planning accordingly. But, if we
continue to get more orders from abroad,
we will definitely also look at supplying to
them. 
interview
Iron ore an area of concern:
Sandvik
Steel Insights Bureau
S
andvik Mining is a leading
global supplier of equipment
and tools, service and technical
solutions for the mining industry, and
their products span the entire range
including rock drilling, rock cutting,
rock crushing, loading, hauling and
material handling.
Sandvik AB subsidiary Sandvik
Asia Ltd has its headquarters in
Pune and manufacturing units in five
places. President of Sandvik Mining
India, Soumitra Banerjee, talks to
Steel Insights on the company’s
focus areas in India, its current
concerns as well as its outlook for
the new year.
Excerpts:
What are the focus areas for Sandvik in
India?
Our major strength in the Indian mineral
sector is on iron ore and underground hard
rock. Thus, a lion’s share of our revenue is
from underground hard rock and iron ore
and the related after market.
In coal, we do not have any presence in
surface and load haul segments at present.
Instead, our focus is on underground for
continuous mining in Bord and pillar
operations and development work in
Longwall mining.
In the Indian mining sector, currently
we are not covering the entire segment. Our
entire product range would come when the
market opens up. As of now, imports are
sourced from Finland and Sweden. We have
manufacturing plants in India for rock tools,
but not for mining equipment as such.
What is your reading of the current scenario
of mining in the country?
There are mixed signals coming from India.
Some people have invested heavily on
captive coal blocks. This had both positive
and negative effects. There were a lot on
controversial things, but also some positives
coming out of it.
Currently, iron ore is an area of concern
for us. As I said, a sizeable chunk of our
revenue comes from this segment. Goa has
stopped exports altogether. Production has
been affected substantially in Karnataka.
The progress of captive blocks is very slow.
In Odisha, steel mills are affected due to
various government notifications restricting
mining of ore in the state.
Overall, the Indian government is
working on various policy initiatives to
properly develop the mining sector. But the
speed of such policymaking is very slow.
How has been the year 2012 for Sandvik
Mining, globally and in India? What is the
outlook on 2013?
In 2012, despite the economic uncertainties,
Sandvik Mining globally achieved its
budgeted revenue targets. 2013 would be
even more challenging and if we can achieve
8 to 10 percent growth in topline, it will be
a very reasonable performance considering
the outlook.
In India, the revenue performance is
approximately 20 percent below the target as
the new mining projects did not come up as
per expectation. This is particularly true for
coal and underground hard rock greenfield
projects. Iron ore was also extremely weak
due to ban on mining in major states like
Orissa, Karanataka and Goa.
What is your level of presence and turnover
in India?
Our mining equipment revenue from India
is around `250 crore. Besides, Sandvik has
presence in materials technology, tubes used
in fertilizer, machining and tooling in India.
For these we have five plants. Sandvik’s
India subsidiary Sandvik Asia Ltd has its
headquarters in Pune and manufacturing
units in Pune, Mehsana, Hosur, Hyderabad
and Chiplun.
The company
has its
research and
development
centre in
Bangalore. Its
businesses in
India include
materials
technology,
tooling, mining Soumitra Banerjee, President,
and construction Sandvik Mining India
equipment.
Overall, Sandvik has its presence in
India for nearly 60 years now. Our total
turnover from the Indian operations is
around `2,600 crore.
What is your current market share in India?
In India, competition is intense. There are
a number of international players present
in the mining equipment sector. Almost
everybody is affected due to the slow
progress in the country’s mining sector. This
includes Metso, Caterpillar and Terex. India
accounts for around 2 percent of our global
turnover. The major markets are Australia,
South Africa and Canada. Russia and CIS
countries are coming up and Sandvik is
doing a lot of work in those countries.
What is the scenario in the Chinese market?
In China, we are seeing a slowdown in both
the segments of construction and mining
equipment. Due to Chinese slowdown,
Australian miners supplying ore to that
country are facing problem. Also, coking
coal imports by the country was down in
2012.
In our case, China’s share in our global
turnover is around 7-8 percent. We have
a manufacturing set up in that country.
Besides, Sandvik mining has manufacturing
facilities in France, Sweden, Finland and
Australia.
Lastly, what was the impact of the recent
split of Sandvik’s global mining and
construction divisions?
The objective of this split was to gain
increased customer focus. Today,
aftermarket demand from these two
divisions is entirely different and we are
reaping benefits of increased focus. 
Steel Insights, February 2013 29
 SPECIAL feature

current lead runners China and Japan.

India examines options Among these two, China (despite importing

around 45 to 50 mt of coking coal in 2011)
is much more self-sufficient, producing the

as Chinese demand chart

vast majority (over 500 mt) of the dry fuel
from its own mines to feed its giant steel
plants. Japan, in contrast, is almost entirely

coking, coke trend

dependent on imports.
Between the two, India should find
greater resemblance to the island nation of
Far East Asia. As they grow their steel output,
the Indian steel mills would increasingly face
the problem of import dependence for coking
coal procurement. But whether they will take
a lesson from their Japanese counterparts –
the well-knit Japanese Steel Mills (JSM)
– in turning their weakness into strength,
and dictating terms in international price
benchmarking, is a matter to wonder about.

India’s coking coal procurement

Steel Insights Bureau
to jump. By 2016-17, coking coal demand by
India’s expanding steel sector is expected to
As of today, all of the major Indian
steelmakers – SAIL, JSW, RINL, Tata
Steel, JSPL, Essar – procure some part
or their entire requirement of coking coal
from overseas miners. Only the integrated
steel plants – such as SAIL and RINL – get
some portion from Bharat Coking Coal Ltd
(BCCL), the only significant producer of
coking coal in India.
Tata Steel is a notable exception, having
acquired coking coal mines (through joint
ventures) in Australia (Bowen Basin in
Central Queensland) and Mozambique

M
uch in contrast with iron ore, India be around 90.2 mt and import would more (Benga Coal Project). The company mostly
is critically short of coking coal as than double, according to an estimate by the sources the fuel from its own overseas
a natural resource. The proven working group on steel. operations for its steel plants in Europe,
reserve of coking coal is only 17.9 billion However, strangely enough, there is Asia and elsewhere. This, however, remains
tons, much less than the vast proven reserves hardly any concern about the increasing a rarity in the Indian steel vertical. Except for
of non-coking coal of 99 billion tons. Of the requirement of coking coal in the country. very few players – that includes coke maker
total proven coking coal reserves, deposit of With such high growth in imports, India Gujarat NRE Coke Ltd – acquisition of
prime coking coal is only 5.3 billion tons, would possibly become the largest importer coking coal mines have not been on the radar
official data shows. of coking coal a few years on, surpassing of the Indian corporate entities.
More importantly, the quality of coking Break-up of coking and non-coking reserves (in million tons)
coal available is quite inferior, so much so
Depth Coking Non-coking High Grand
that sometimes costlier imports prove more
Range (m) Prime Medium Semi coking Superior Inferior Ungraded Sulphur Total
economical.
As of 2011-12, India’s coking coal 0-300 0.00 11566.45 466.38 21585.76 129038.81 9894.48 1290.64 173842.52
consumption was around 50 million tons 0-600 4043.42 4067.00 0.00 202.42 5899.58 0.00 0.00 14212.42
(mt), of which around 33 mt was met by
300-600 0.00 5869.61 758.14 12362.80 49294.31 15436.32 202.00 83923.18
imports, 85 percent of which came from
600-1200 1269.64 5165.48 482.61 2505.12 7144.89 4951.29 0.00 21519.03
Australia.
With the growth in steel demand to 0-1200 5313.06 26668.54 1707.13 36656.10 191377.59 30282.09 1492.64 293497.15
113.3 mt by 2016-17 from 65.61 mt in 2011- Source: Geological Survey of India (GSI)
12, coking coal demand in the country is set

30 Steel Insights, February 2013

SPECIAL feature

Estimated requirement of raw materials and other inputs by 2016-17 Massey, Banpu, Xstrata, Yanzhou, Glencore,
Anglo, Arch, Rio, James River. The major
Estimated Estimated Additional Requirement
Input Materials Unit
Consumption 2011-12 Consumption 2016-17 by 2016-17
supplier countries are Australia, US and
Canada.
Coking Coal Million Tons 43.2 90.2 47.0 The global trade of coking coal stood
Non-coking Coal Million Tons 35.3 28.4 - at around 260-280 mt in 2012. The big
three importers – China, Japan and India –
Iron Ore Million Tons 115.0 206.2 91.2
together accounted for around 155 mt of this
Natural Gas MMSCMD 7.2 13.541 6.341 market.
Ferro Alloys in ’000 tons 2152 3673 1521
As estimated by Merlintrade &
Consultancy, total seaborne trade would
Refractories Million Tons 1.29 1.97 0.69 increase to around 415 mt by 2020, of which
Source: Working group on Steel the top three importers – India, China and
Japan – would claim a share of 271 mt or 65
Nevertheless, almost all the major Indian imports will go up from current 30 mt to 90 percent. This, however, may be a conservative
steelmakers have embarked on very aggressive mt by 2015 surpassing Chinese coking coal estimate. If India can achieve its planned
expansion plans to increase installed capacity. imports. By comparison, China’s coking coal expansion, and Japan’s consumption does not
SAIL has aimed to increase its annual hot imports may be at most 70 mt by 2015. come down dramatically, the share of these
metal production capacity from the current “I think India will become a bigger three countries may go up further.
13.8 mt to 24 mt by FY13. importer than Japan and China, the current On the supply side, Australia would
Accordingly, the company’s coking coal leaders in importing coking coal,” Pervan was continue to dominate the market with
import could increase from current 13 to 14 quoted as saying. export of 255 mt in 2020, with a share of
mt to 21 mt by the next few years. Similarly, While ANZ estimate may seem to be a 61 percent, same as in 2010. While new
the annual coal consumption of JSW, the little on the higher side, another estimate by suppliers like Mongolia, which has started
country’s largest private sector steelmaker, Merlintrade & Consultancy Ltd put India’s feeding the Chinese market, would come up
will reportedly double from current 7.4 mt to coking coal imports at 90 mt in 2020. in due course, Australia’s domination would
14 mt by next two years. hardly wane. US, on the other hand, is likely
Even if the Indian steel sector fails to Global supply scenario to see a drop in exports; this however would
achieve the targeted 10 percent production Currently, the coking coal market is not impact the Indian companies which do
growth annually, coking coal consumption overwhelmingly dominated by mining giants not receive much of the material from that
by all the major steel companies would grow including BHP, Walter Resources, Peabody, country.
immensely by 2020. SAIL has targeted to
have a capacity of 60 mt by that year. RINL, Top met coal seaborne exporters (in mt)
another public sector unit, has chalked out
Country 2008 2009 2010 2020
an expansion from current 6.3 mtpa to 20
mtpa by 2020. JSW, on its part, has planned Australia 134.3 130.0 158.8 255.0
34 mtpa production by then, from 14.3 as US 35.3 29.9 47.8 25.0
of March 2011. Most of this expansion Canada 25.4 20.1 27.0 50.0
would be undertaken through Blast Furnace/
Others 25.6 22.5 30.5 85.0*
Basic Oxygen Furnace (BOF) route, which
require coking coal as primary raw material. Total 220.6 202.5 264.1 415.0
Attempts are being made by a few companies *Including: Colombia, Russia, Indonesia, Mongolia, New Zealand and Mozambique
to adopt the Corex/Finex technology,
whereby thermal coal can be directly used Top seaborne met coal importers (in mt)
for ore reduction and melting work. But the Country 2008 2009 2010 2020
initial investment requirement is substantial Japan 66.5 52.5 62.6 71.0
and there is significant technology barrier in China 6.9 37.0 53.0 110.0
terms of patent rights.
India 26.8 26.8 37.2 90.0
As a result, such prolific expansion in
India’s steel making capacity cannot but be South Korea 21.9 15.0 18.4 38.0
achieved without a huge surge in coking coal Brazil 17.9 15.0 18.4 38.0
imports. As estimated by Mark Pervan, Head Others 81.0 51.0 66.3 75.0
of commodity research at the Australia and Total 221.0 202.0 260.7 415.0
New Zealand Banking Group (ANZ), India
Source: Merlintrade & Consultancy Ltd
may triple coking coal imports as early as
2015. He estimates that India’s coking coal

Steel Insights, February 2013 31

SPECIAL feature

In coming years, experts say, the demand Tolgoi coal mine is a case in point. The Annual production capacity of
boom from China and India would lead to a aggressive bidding for properties coupled some players in India
demand-supply gap in global trade of coking with growing supply gap would invariably Annual production
Company
coal. This is particularly feared for premium lead to pricing pressure for this vital raw capacity (tons)
quality coking coal market, where there will material. Tirupathi Fuels Pvt ltd 110,000
be not enough resource to supply. The share United Coke Pvt Ltd
of high quality coking coal, in countries 2013 outlook Antai Balaji Coke 120,000
having significant coal deposits, is less than 1 Notwithstanding the long term expectations, Fairdeal suppliers 300,000
percent of proven reserves. The requirement the met coal market saw a softening of prices Narayani Coke 300,000
however is much above that percentage. in much of 2012. As of now, the big question
Also, there would be limited new Ennore Coke 180,000
is whether the spot prices in the international
production from countries like Mozambique, market will see a recovery in 2013. The Saurashtra Fuels 700,000
Indonesia and Mongolia, at least until 2015- analysts generally believe the prices would Krishna Coke
16. US may have already reached the stage of not show any major turnaround this year. Visa Steel 400,000
decline and is expected to see steady fall in Credit Suisse and Dahlman Rose & Co Bengal Energy Limited 600,000
exports, going forward. Canada may emerge see average prices remaining lower in the Carbonedge Industries 90,000
as a bigger player, but Australia’s shipping range of $171-180 per ton FOB Australia
Global Coke Pvt Ltd 600,000
constraints would pose a threat. when compared to 2012’s average of $191
A major factor leading to tightened supply OSD Coke Pvt Ltd
per ton FOB.
scenario could be the fast depletion of China’s While marginal improvements are Sathavahana Ispat Pvt Ltd 400,000
own reserves. Coking coal reserves comprise expected in terms of steel demand in 2013, BLA Industries
about 20 percent of the country’s total coal significant gains are thought to be unlikely. Uttam Galva 432,000
reserves, but in terms of production, its share Credit Suisse, for example, sees the met coal Maa Shakti Coke 1,100,000
is higher than that. According to industry market as “structurally well supplied”. It has Bhatia Coke & Energy Ltd 300,000
reports, the thick coal seams in Shanxi coal estimated that 2013 will see an excess of 10
mine is already showing significant thinning. Balaji Coke Industry Pvt Ltd 120,000
mt of met coal, so any gains should be “fairly
If the country decides to conserve its own Austral Coke & Projects
muted”.
resources for future, there would be massive Other banks appear to agree, though Gujarat NRE Coke pvt Ltd 1,434,000
pressure on the global market. This could differing in the magnitude of the over-supply, Shree Coke Pvt Ltd 110,000
be a likely scenario; given that the country’s which Morgan Stanley puts at 4 mt. Only Source: Insights Research
coking coal import has increased eight-fold Goldman Sachs sees a possible shortage of
in a gap of two years (2008-10). met coal, anticipating a net deficit of 1 mt
In the long run, the tightening of supply coal imports to make manufacture. Being
this year.
would intensify competition among the well aware of this weakness during contract
mining companies for tapping new sources. India Inc. looks elsewhere negotiations, Indian mills have embarked on
The recent fierce competition among mining an active hunt to diversify their coal supplies,
With insignificant coking coal reserves,
giants for long term rights of Mongolia’s and of late Mozambique has been the centre
India is substantially dependent on met
of their attention. Large mills such as JSPL,
JSW Ispat and Tata Steel are amongst the
Integrated steel plants with captive coke making plant (in mt)
big steel players to have secured supplies.
0.60 However logistical issues continue to
1.20 3.00
1.30 hamper Mozambique from becoming big
in the spot market, with supply estimates
2.50 2.60 recently downrated by some.
While India has Mozambique, China
has Mongolia, which since mid-2010 has
overtaken Australia as the top supplier of
2.50 met coal to China, contributing slightly more
than a third of Chinese imports (Australia
now supplies under 25%).
Some projects are also currently in the
pipeline to push landlocked Mongolian
Tata Steel Bhilai Bokaro RINL Durgapur Rourkela IISCO HCC to the seaborne market, with the
Source: Insights Research potential to give Australian miners a run

32 Steel Insights, February 2013

SPECIAL feature
Major buyers in India
The major buyers in the Indian market
include the following players:
1. Tata Steel
2. Steel Authority of India Ltd (SAIL)
3. Jindal Steel & Power Ltd (JSPL)
4. Adhunik Limited
5. Concast Limited
6. Other secondary steel manufacturers
for their money. However, all is not rosy in
Mongolia, with unattractive regulatory and
fiscal developments proving something of a
disincentive.
Other suppliers, such as the USA, have
continued to play an active role in the seaborne
met coal market from time to time, but the
country has always been a swing-supplier to
Asian-Pacific markets, since its home ground
still remains the Atlantic region.
However, as demand conditions in
Europe faltered in 2012 due to the continuing
economic malaise, US suppliers actively
pursued Asian customers, particularly when
they saw opportunities to be price competitive
with Australian suppliers.
Current trend in Indian coke market
Along with coking coal, India also suffers
from inadequate domestic production of met
coke. Currently, the demand deficit in local
market is around 13 mtpa. With the expected
increase in demand (to the tune of 15~16
mtpa in next 4-5 years), the deficit is likely
to increase to 28 mtpa. Import of coke into
India stood around 2.1 mt in 2011-12. The
slow steel market is keeping the LAM coke
market slow too at present.
Coke plants across India &
capacities
Currently, coke plants in India have an
installed capacity close to 30 mt. The
integrated steel mills have their coke making
capacities around 19 mt. The secondary steel
producers have captive installed capacity of
4 mt. Merchant coke plants have installed
capacity of 7.2 mt.
Challenges in meeting coke demand
The Indian steel industry is currently is
currently facing huge challenge to meet its was the world's largest coke exporter in the
coke requirements. Although most of the seaborne market (at 15 mtpa). While many
integrated steel plants are already in the market participants feel that exports are
process of increasing their coke making unlikely to revive to that level, a modest 6-8
capacities, the deficit of metallurgical coke in mt of coke is expected to be exported out of
India is expected to increase from current 12 China this year.
mt to 25 mt by 2015. Applying a widely accepted coal-coke
Besides low production, the logistics conversion factor of 1.3, this potentially puts
sector poses a major challenge. There is an increase of approximately 7.8-10.4 mt on
urgent need to increase the number of ports to Chinese coking coal demand.
on the coast line and dredge the river ports However, this increase is unlikely to
to reduce cargo movements through rail and jolt seaborne prices as much of it would be
road. sourced from Mongolia, which is closer to
The internal logistics cost in India is very many Chinese coke ovens located in the
high. The local freight for 100 km is equal to inland provinces of Shanxi and Hebei.
5,000 mile sea freight in eastern India where Another possible spill-over effect of
major steel projects are on. Also, pilferages China's new ruling on coke exports could
(to an extent of at least 1 percent) need to be a possible displacement of some coking
be controlled. There is need to enhance the coal supplies elsewhere if importers decide
berthing facilities and regulate the intra-port to decrease their captive coke making
transportation of imported cargo. Allocation operations and import Chinese met coke
of more rail rakes for the speedy movement instead. Nevertheless, whether this trend
of coal is yet another pressing need. will actually catch up with the Indian
Over and above all these, the delay in market is still a matter of guess, industry
getting environmental clearances poses a sources said. 
major hurdle in implementing new and
expansion projects.
China’s coke
card
While the Indian
industry struggles to
meet its growing met
coke requirement,
a new development
in neighbouring
China has come to
take the market by
surprise. Recently,
China has allowed
full liberalisation
for its metallurgical
coke export sector – a
development which
may have varied
implications for the
domestic coking coal
consumption.
Prior to 2008,
when a 40 percent
export duty was
slapped on met
coke exports, China
Steel Insights, February 2013 33
SPECIAL feature

Steel consuming sectors

maintain sluggish growth
Steel Insights Bureau the Reserve Bank of India (RBI) by 25 basis to industry sources and trade data.
points. In the fourth quarter (Q4) ending March

M
uch to the dismay of the Indian The growth trend has been a little better 2013, around 1,700 projects are scheduled
steelmakers, the steel consuming for the construction sector, where industrial to get commissioned in various industries
sectors in the country have and infrastructural projects worth `1.8 such as steel, gas transportation, power
continued with sluggish growth in recent trillion have already been commissioned generation and distribution. It is expected
months. This was in line with the slow during April-November, 2012-13, according that construction activity will be in full
growth of the economy which is expected to
post modest growth numbers in the current Automobile sector growth
fiscal.
The slow growth was particularly
evident in the automobile sector. According
to data available, there was a steep decline in
commercial vehicle sales during December
and a slight decline in passenger vehicle
sales during the period. Trade sources
attributed the lack of improvement in trade
to the slow economic growth in the country,
which has a direct bearing on commercial
vehicle sales.
Also, the high interest rate continued
to plague the passenger vehicles market.
The sector growth was expected to remain
under pressure in January 2013 but a slight
improvement is likely by the end of February
2013 on the back of repo rate revision by Source: SIAM

34 Steel Insights, February 2013

SPECIAL feature

swing during the last quarter of 2012-13, the

Construction sector growth
sources said.
However, the cumulative growth in
cement production (April-November, 2012-
13) has decreased from 7.7 percent to 6.7
percent. Cement production and demand is
estimated to increase in the fourth quarter as
construction activity picks up with pending
projects due for completion by year end.
In contrast, capital goods contracted by
7.7 percent in November 2012 over November
2011. According to sources and industry
officials in the sector, the remaining period of
2012-13 would continue to show de-growth
due to high interest rates. Nevertheless, the
decrease in interest rates in 2013-14 is likely
to revive project expenditure which in turn
Source: CMIE & MOSPI should lead to a much-awaited revival in the
sector, officials said.
The consumer durables sector also
Capital goods sector growth
showed sluggish growth trends and grew by
only 1.9 percent in November 2012 compared
to November 2011, pulled down by the high
base effect.
Industry sources said inventory build-
up to meet the festive demand led to
extra production in October and this
high inventory led to lower production in
November. The sector is expected to clock
better growth figures in the fourth quarter
aided by the low base effect, officials felt.
Meanwhile, the white goods sector has
continued with the growth trend, aided by
the low base effect from the previous year.
However, trade sources said a lull in the
growth of white goods is expected for the
Source: CMIE Analysis next few months, due to the post-festive
season drop in sales.
Consumer durables sector growth Although the IIP contracted by 0.1
percent in November 2012, dragged down
by poor performance by all three sectors:
manufacturing, mining and electricity but
upwards movement of the PMI, based on
higher export orders and increased factory
activity, suggests that industrial production
will be much healthier for January-February
period of 2013.
Mining is also expected to get a slight
boost post January 2013 as a few mines start
operations in Karnataka after being declared
suitable to resume operations.
With construction also set to pick up
pace in the coming months, economic
growth is expected to be positive in January-
Source: CMIE Analysis February 2013. 

Steel Insights, February 2013 35

 feature
Indian iron ore imports set to
rise over time
Steel Insights Bureau
T
he severe shortage in iron ore
supplies from Karnataka and Goa,
where mining was stopped following
a Supreme Court directive, and the cap
on production in Odisha have led to India
becoming a net importer of iron ore this
financial year. Till 2011, India was the third
largest exporter of iron ore.
According to industry sources, between
April and December 2012, India imported an
estimated 6 to 7 million tons (mt) of iron ore.
Some steel mills such as JSW Ispat, Bhushan
Steel and Essar Steel have been importing
ore for their port-based steel plants. JSW
Ispat has also used imported iron ore for its
plant in Salem and is considering importing
the commodity for its plant in Bellary, too.
An export duty of 30 percent, coupled
with the Railways’ high freight rates on
iron ore exports, also led to the sharp fall in
exports.
According to the Federation of Indian
Mineral Industries (FIMI), India’s iron ore
exports fell 62.3 percent to 15.05 mt in the
April-November period, against 39.95 mt
in the corresponding period of the previous
year. Since November, no iron ore exports
from India were recorded.
The steel industry expects the availability
of iron ore to fall further in the next financial
36 Steel Insights, February 2013
year (2013-14), owing to several constraints
in many iron ore-producing states.
While the Supreme Court has allowed
Category “A” mines in Karnataka to resume
mining, only four mines have done so in
the last few days. So far, these mines have
produced about 1 mt of ore, which has been
put up for auction.
State-owned National Mineral
Development Corp (NMDC), which has
been allowed to produce 1 mt a month
from its Karnataka mines, is able to produce
only about 700,000 tons due to logistical
bottlenecks.
FIMI estimates production in Karnataka
during 2013-14 at about 15 mt, assuming
more mines in Category A and B resume
mining. The estimated production would
include about eight mt from NMDC.
All steel mills operating in India might
have to either import iron ore or shut
operations, according to analysts. The
Odisha government has capped iron ore
production at 52 mt. For miners whose
leases are pending for renewal, capacity has
been restricted to meeting only their captive
requirements.
However, there was some respite after
the Union Mines Ministry’s revision
authority stayed the enforcement of Odisha
government directive that barred merchant
miners to raise minerals during their deemed
extension period. The authority has stayed
the resolution after hearing complaints of
several merchant miners of Odisha.
“The latest move will increase iron
ore availability in the country, which was
affected to some extent after the Odisha
government in its October 3 circular issued a
new guideline for the second and subsequent
renewal of iron ore, manganese, chromite and
bauxite mines in the state,” industry sources
said.
According to the circular, if the mineral
from the mining lease is being used for
captive purpose, the areas to be renewed shall
be limited to the captive requirement of 30
years of the existing capacity of the mineral
industry of the lessee.
The circular had severely affected
availability of iron ore in the country as well
as steelmakers without any captive iron ore
mines.
It said the leases awaiting second and
subsequent renewal but operating under the
clause of deemed extension will be covered
by this policy. However, in such cases,
mineral production may be limited to captive
consumption only.
After this resolution, several merchant
miners have been affected in the absence of
their own plants. Against this resolution, the
miners had knocked the door of the revision
authority.
With the staying of the circular, miners
with forest and other clearances can start
their operations immediately, while those
without forest clearance have to wait for
some more time, industry sources said.
In Goa, resumption of mining depends
on a directive from the Supreme Court.
Once the mining ban was lifted, production
was likely to be capped at 25 mt, analysts and
industry sources said.
Export duty
At a time when the steel industry is reeling
under a severe shortage of iron ore, following
the suspension of mining in Goa and
Karnataka and the imposition of a cap on
mining in Odisha, miners are seeking a drastic
cut in the export duty on the commodity.
The mining industry, represented by the
FIMI, is also seeking the railways charge
uniform freight rates on iron ore.
In FY10, the ministry of finance had
imposed five percent duty on the export of
feature
Prices in different markets in India
Company Size Grade
NMDC
6-20mm
10-150mm
65
64
Fines 64
5-18mm 65
5-18mm 63
Rungta
10-30mm 65
10-30mm 63
5-18mm 63
Essel 10-30mm 63
Blue Dust 63
iron ore fines. This was raised to 20 percent
in FY11 and 30 percent in FY12. Between
February 2010 and March 2012, the railways
increased freight nine times. Today, it is
about four times the domestic freight for iron
ore (`2,600 a ton). FIMI says as a result of
these factors, iron ore exports have turned
unviable.
In a pre-Budget memorandum to the
ministries of finance and railways, Fimi has
urged for a cut in export duty and railway
freight to ensure the industry recorded high
exports.
“The export duty of 30 percent on
iron ore fines is a deterrent to the effective
functioning of the Indian mining industry.
During our recent interaction with the
ministry of finance, we requested the
government to reduce export duty on iron
ore fines in Budget 2013-14 to 5 percent,”
said R.K. Sharma, secretary general, FIMI.
Earlier, the ministry of mines had also
requested the finance ministry to reduce duty
on iron ore exports. Sharma said India was
losing ground in global markets — its share
in iron ore exports to China fell from 20
percent in 2007 to 11 percent in 2011 and
eight percent in the first half of 2012. This
financial year, the country was also losing
foreign exchange due to imports, he added.
Fines are a co-product of producing
calibrated lump ore. The ratio of lumps
generated to fines is 30:70.
However, steel industry executives said,
“Reduction of duty on exports will not
help the domestic steel industry, which is
already facing a huge shortage of quality raw
material. Why should India reduce its duties
when countries such as Australia and China
17-Dec
Price (ex-Mine)
8-Dec 14-Nov 31-Oct
Iron ore availability to
5080
4210
5400
4480
5400
4480
6070
5040
improve in 2013-14:
2600 2600 2600 2697 JSW Steel
7650 7650 7560 7650
JSW Steel expects availability of iron ore
7250 7250 7250 7250
in the next financial year will be in the
6900 6900 6900 6900 range of 19 to 21 million tons (mt), while
6500 6500 6500 6500 the steel industry in Karnataka requires
7225 7225 7225 7225 30 mt.
6475 6475 6475 6475 “However, the company is exploring
the possibility of using dumps with very
2600 2600 2600 2600
low quality,” JSW said in a statement.
“Non-availability of iron ore and poor
have imposed 25 percent and 30 percent duty quality of ore impacted the productivity
on iron ore and coal, respectively? There is no by 20 percent. Most of the sponge iron,
necessity for India to reduce the duties.” pig iron and pellet plants in the state of
Basant Poddar, managing director, Karnataka are either closed or operating
Mineral Enterprises, said the Karnataka at around 20 percent capacity. Integrated
mining industry’s priority now was to restart steel players capacity utilisation is at
mining, adding that as of now, it would do around 70 percent,” JSW said.
well not to worry about the duty structure. The stock piles of 25 mt ore more
FIMI has also sought the duty on iron or less were auctioned but NMDC is
ore imports be brought on a par with the duty not able to produce even after lapse of
on iron ore exports. Currently, import duty 17 months from the date of permission
on iron ore lumps and pellets is 2.5 percent. by Supreme Court, 1 mt of iron ore per
month, it said.
Odisha fines prices stable, lumps So far, only six mines of Category
down ‘A’ resumed operations when Supreme
Meanwhile, prices of iron ore fines Court approved resumption of mining
remained stable in Odisha while that of in Category ‘A’ in September 2012.
lumps declined marginally in the last one These mines produced 0.71 mt so far,
month, according to an official in an iron but produced ore is not put to e-auction.
ore mining company. On this backdrop, the company expects
Iron ore with iron content of 63 percent improvement in availability of ore as the
remained unchanged at `2,600 per ton ex- balance stock pile of around 1 mt would
mines in Odisha as on January 17, according be auctioned.
to the official. However, prices of lumps “Besides six mines, the balance four
with 63 percent iron content were quoted at mines of Category ‘A’ will also resume
`6,900-7,100 per ton ex-mines. production in Q4 FY’13 and all these
The fines prices have remained stable mines together are permitted to produce
because of marginal rise in fines demand in 5 million tons per annum (mtpa),” JSW
the region, he said. said.
Indian private miners based in Odisha, The company expects that the
have preferred to keep their prices unchanged Supreme Court will consider resumption
for mid- January on low production, confusion of mining in Category ‘B’ mines with
on 50:50 sale of iron ore to industries based permitted production of 6 mtpa. NMDC
in Odisha and stable sponge iron prices in is expected to enhance production to 8 to
the country. 10 mtpa, JSW said.
NMDC, India’s largest iron ore producer, The recommendation of CEC to
is likely to declare its prices in the first cancel Category ‘C’ mines and auction
week of February, which will give a further them to end users is expected, it added.
direction to the market. 
Steel Insights, February 2013 37
feature
Proactive Budget needed to
solve issues: Nerurkar
Steel Insights Bureau
T
he Indian steel industry will greatly
benefit if the Union Budget 2013 takes
proactive steps to solve the lingering
issues of iron ore shortage and continued
delay in project approvals, H.M. Nerurkar,
managing director at Tata Steel, said.
“The Indian steel industry is facing
problems due to shortage of iron ore and
continued delay in project approvals. The
industry will benefit from proactive actions
on these fronts in the Union Budget,”
Nerurkar said in an e-mailed statement.
“The first six months of the current fiscal
have seen a 40 percent jump in steel imports.
In order to protect interests of the domestic
industry, the Budget needs to revisit last year’s
hike in excise duty and take steps to discourage
dumping of products in India,” he said.
In line with the government’s policy of
reducing import duty for raw materials for
making steel, import duty on steel grade
limestone, dolomite (which is presently 5
percent) and iron ore (which is currently
2.5 percent) should also be reduced to zero,
Nerurkar said.
Given the priority accorded to
infrastructure in the Twelfth Plan (2012-
17), and the expectation that the private
sector would contribute half the envisaged
investment of `50 lakh crore, the Budget
should also look at introducing special
incentives to encourage capital goods
industries, he added.
Assocham proposal
In light of the huge scarcity of coking coal,
Assocham has mooted a proposal to amend
the definition of ‘coking coal’ with a view to
promote and encourage the steel industry to
shift to new and advanced technologies.
In a proposal submitted to the ministries
of coal and steel, the chamber said
traditionally, steel is made through blast
furnaces by utilising coke made out of coking
coal. Coking coal is converted into coke in
38 Steel Insights, February 2013
the coke ovens and such coke is used as fuel
to charge the furnaces; as reductant to reduce
the consumption of iron ore used.
Steel and power sectors are the major
consumers of coal. In order to fulfill the huge
requirement of these sectors, Government
allows both them to import coal at
concessional rate of import duty. Coal used in
the power sector is defined as steam coal and
attracts 1 percent import duty, whereas coal
used in steelmaking is defined as coking coal
and attracts zero rate of import duty.
Coal for utilisation in the steel industry is
defined at S No. 122 of Custom notification
12/2012 as “coking coal - means coal having
mean reflectance of more than 0.60 and
swelling Index or Crucible Swelling Number
of 1 and above”.
However, “we would like to mention
that the above mentioned parameters are too
technical and sensitive. It would be worth
to mention over here that the departmental
labs are not equipped to test these parameters
creating delays and giving rise to litigation
which ministry itself wants to avoid. Therefore
we need to simplify the definition of coking
coal based on end use application like in the
case of steam coal,” the chamber said.
The scarcity of coking coal across the
world has resulted in the use of economically
efficient alternatives for manufacturing of
iron and steel through new and advance
technologies. These advanced and
environment friendly technologies can utilise
even thermal coal or weaker coking coals for
iron and steel making. Presently, the Indian
steelmakers deploy COREX/PCI/FINEX
technologies and utilise thermal coal and
weaker coking coal for making steel.
Although these coals are used for steel
making, they cannot meet the parameters
of coking coal as defined at S No. 122 of
custom notification 12/2012. Coals not
meeting the parameters in test but being
used for metallurgical purposes in COREX
/ PCI / FINEX, are being charged to duty as
“other coals” at the rate of 5 percent. This has
defeated the well intentioned objective of the
government to provide relief to steel industry.
Therefore, Assocham has suggested
that tariff description for “coking coal”
(coal having mean reflectance of more
than 0.60 and Swelling Index or Crucible
Swelling Number of 1 and above)* should be
substituted by the description ‘metallurgical
coal’, or “coals for use in iron & steel making
using any technology such as Blast Furnace,
COREX, PCI or FINEX”.
The chamber further notes that the test of
mean maximum reflectance (MMR) is very
sensitive and there is no facility for testing
MMR in Customs Lab at any of the ports.
Therefore, the testing of the country’s 23.87
million tons (2011-12 to December 2012 as
per Ministry of Commerce figures) imports
of coking coal is to be done at the only centre
of CIMFR, CISR, Dhanbad (Jharkhand)
which itself is a huge task; voluminous and
defeating in purpose. Add to this, the cost of
testing each sample is approximately `33,450.
The process of drawal of sample, its
dispatch, testing and receipt of reports is
too tardy and time consuming and pending
the test reports, consignments are assessed
provisionally and test bonds are to be executed
in each case. Moreover, the crucible swelling
number (CSN) is the other parameter to
satisfy the condition of coking coal. A coal
having CSN 1 as per load port certificates,
certified by international assayers, is tested
below 1 by various Customs lab due to
varying testing practices/ methods. This
gives rise to litigations defeating the well-
meaning intentions of the government. 
feature
Auto industry posts marginal
growth in December
Steel Insights Bureau
A
fter a negative growth in November
2012, the Indian automakers posted
marginal growth in the month of
December 2012. The cumulative production
data for April-December 2012 shows
production growth of only 2.16 percent over
the same period last year.
According to the Society of Indian
Automobile Manufacturers (SIAM), the
industry produced 1,697,625 vehicles
in December 2012 against 1,677,588 in
December 2011, with marginal growth at
1.19 percent.
Sales
The overall growth in domestic sales during
April-December 2012 was 4.57 percent
over the same period last year. However,
in December 2012, overall sales grew only
marginally by 2.77 percent over December
2011.
Passenger Vehicles segment grew at
8.37 percent during April-December 2012
over same period last year. Passenger Cars
declined by -0.33 percent, Utility Vehicles
grew by 59.10 percent and Vans grew by
3.71 percent during April-December 2012
as compared to the same period last year.
However, in December 2012 passenger car
sales fell by (-12.51) percent over December
2011. Total passenger vehicles sales also
declined by (-1.13) percent in December
2012 over same month last year, as per SIAM
figures.
The overall Commercial Vehicles
segment registered marginal growth of 0.74
percent in April-December 2012 as compared
to the same period last year. While Medium
& Heavy Commercial Vehicles (M&HCVs)
registered decline at (-19.13) percent, Light
Commercial Vehicles grew at 15.61 percent.
In December 2012, M&HCVs sales declined
by (-38.34) percent over December 2011.
Three Wheelers sales grew by 4.96
percent in April-December 2012. Passenger
Carriers grew by 8.96 percent during
April-December 2012 and Goods Carriers
registered de-growth at (-10.29) percent
during this period.
Two Wheelers registered a growth of
only 4.09 percent during April-December
2012. Scooters, mopeds and motorcycles
grew by 18.44 percent, 1.80 percent and 0.77
percent respectively over same period last
year. However, in December 2012 Scooters
and Motorcycles grew by 6.40 percent and
4.83 percent respectively, while mopeds
declined by (-6.88) percent over the same
period last year.
Exports
During April-December 2012, overall
automobile exports registered de-growth
of (-2.92) percent compared to the same
period last year. Passenger Vehicles grew by
10.52 percent, while the other segments like
Commercial Vehicles, Three Wheelers and
Two Wheelers fell by -4.76 percent, -20.88
percent and -2.79 percent respectively. In
December 2012 Passenger Vehicles, Two
& Three wheelers segment grew by 31.59
percent 9.36 percent and 4.63 percent
respectively, while Commercial Vehicles
declined by -25.79 percent.
Impact on steel sector affected by high interest costs.
Meanwhile, India Ratings, a Fitch group
company, has forecasted that the Indian
automobile industry would remain modest
during 2013. The industry’s growth is
expected to be largely driven by the economic
scenario in the country which at this point,
looks gloomy. In turn, the lukewarm growth
in automobiles would affect the steel
industry’s growth in the country.
World Steel Association (WCA) has
forecasted steel consumption in India to
grow at 5 percent in 2013. Steel producers
may see a spurt in demand in the medium-
term if the Indian government implements
its $1 trillion infrastructure investment plan
in a timely manner. However, the demand
for flat steel from automobile, white goods
and capital goods sectors is likely to remain
modest during the year, it said.
Though Indian steel producers increased
prices by `500-1,000 per ton in December
2012, India Ratings expects profit margins
in 2013 to remain broadly similar to 2012
levels. This is due to the persistent high
cost of steel production and steel producers’
limited ability to pass on higher costs due to
subdued demand from end-user industries.
The margin pressure will be higher on the
producers with no captive raw material
linkages.
The cost of funding working-capital
requirements remained high despite the
marginal reduction in repo rate by the Reserve
Bank of India in early 2012. India Ratings
expects a gradual reduction in interest rates
in 2013 which should provide some relief
in interest costs. While higher-rated issuers
invariably have access to bank funding and
capital markets in certain cases, most issuers
in the ‘IND A’ and below categories rely
largely on bank financing and are severely
Considering the modest demand
scenario, a further rupee depreciation
could pressurise the margins of companies
producing flat steel through blast furnace
route as bulk of coking coal is imported. This
is despite import price parity of flat steel
products. Moreover, a weaker rupee raises
the financial leverage of steel producers
with significant un-hedged foreign-currency
liabilities resulting in a decrease in financial
flexibility. However, the agency expects
financial leverage of rated entities to remain
within the guidelines stipulated for the
respective rating category. 
Steel Insights, February 2013 39
feature

World steel production - ranking of

India ranks top in

countries (growth wise)
(million tons)
Sl. Apr- Apr- %
Country

production growth
No. Nov ’11 Nov ’12 Growth
1 India 48.85 51.47 5.36
2 Turkey 23.06 24.00 4.07
3 China 461.44 476.93 3.36

Steel Insights Bureau “I take pride in announcing that the 4 Russia 45.36 46.68 2.89
growth rate achieved by India is five times 5 USA 57.66 58.23 0.98

D
espite the weak sentiment prevailing
in the domestic steel sector, India
has emerged as the top ranker in
terms of production growth in the world
during April-November, 2012. Announcing
this, steel minister Beni Prasad Verma has
applauded the Indian steel industry for being
the number one in terms of growth rate in
steel production amongst the top ten steel
producing countries.
During April-November 2012, the
Indian steel industry achieved a growth rate
of 5.36 percent which was the highest in the
world, government said in a statement.
During the period China stood third
with a growth rate of 3.36 percent. The
world’s average growth rate of steel was just
0.97 percent during this period.
the world average growth rate of steel. 6 Japan 71.49 72.09 0.84
I congratulate the industry stakeholders 7 South Korea 45.94 46.19 0.53
on achieving this feat and sustaining this
8 Brazil 24.06 23.35 -2.94
remarkable growth,” the steel minister said.
“Today, India is the fourth largest steel 9 Germany 29.87 28.73 -3.83
producer in the world. It is my dream to see 10 Ukraine 23.73 21.99 -7.35
India become the second largest in the world. Source: Steel Ministry
All the main and major public and private
sector steel plants must gear up to achieve Secondary producers, comprising largely
this goal in the coming years,” Verma said. induction furnace units, had produced
around 33.15 mt of steel in the April-
The country’s total steelmaking capacity December period of 2012-13 out of the total
stood at 92 million tons (mt) till September finished steel production of 56.56 mt during
2012, a marginal rise from the last recorded the period, initial provisional steel ministry
capacity of 89 mt as on March 2012, a steel data showed.
ministry official told Steel Insights. Much
of the increased 3-mt capacity was in the Steel delegation to Singapore
induction furnace segment, the official said. Meanwhile, representatives from Indian

40 Steel Insights, February 2013

feature
India Ratings outlook for steel remains stable
I
ndia Ratings & Research, a Fitch
group company, expects credit profiles
of its rated steel producers to remain
stable in 2013, driven by continued slow
growth in domestic steel demand.
The majority (92 percent) of the
ratings are on stable outlook and most of
them are below ‘IND BBB-’, which reflects
the inherent risks in the steel sector.
World Steel Association (WSA) has
forecasted steel consumption in India to
grow at 5 percent in 2013. Steel producers
may see a spurt in demand in the medium-
term if the Indian government implements
its $1 trillion infrastructure investment
plan in a timely manner. The demand for
flat steel from automobile, white goods
and capital goods sectors is likely to remain
modest in 2013, given the continued slow
economic growth, India Ratings said in a
statement.
Though Indian steel producers
increased prices by `500-1,000 per ton in
December 2012, India Ratings expects
profit margins in 2013 to remain broadly
similar to 2012 levels. This is due to the
persistent high cost of steel production
and steel producers’ limited ability to pass
on higher costs due to subdued demand
from end-user industries. The margin
pressure will be higher on the producers
with no captive raw material linkages.
The cost of funding working-capital
requirements remained high despite the
marginal reduction in repo rate by the
Reserve Bank of India in early 2012.
steel mills and steel ministry were on a
three-day visit to Singapore in January 2013
to seek investments from fund houses like
GICS and Temasek among others to ensure
finance for their expansion plans, industry
sources said.
The delegation was led by Union Steel
Secretary D.R.S. Chaudhary and comprised
representatives of both public and private
sector firms. They met officials from
India Ratings expects a gradual reduction
in interest rates in 2013 which should
provide some relief in interest costs. While
higher-rated issuers invariably have access
to bank funding and capital markets in
certain cases, most issuers in the ‘IND A’
and below categories rely largely on bank
financing and are severely affected by high
interest costs.
Considering the modest demand
scenario, a further rupee depreciation
could pressurise the margins of companies
producing flat steel through blast furnace
route as bulk of coking coal is imported.
This is despite import price parity of
flat steel products. Moreover, a weaker
rupee raises the financial leverage of steel
producers with significant un-hedged
foreign-currency liabilities resulting in a
decrease in financial flexibility. However,
the agency expects financial leverage
of rated entities to remain within the
guidelines stipulated for the respective
rating category.
The Indian iron ore mining industry
is undergoing a difficult phase given
regulatory intervention in various states.
Even though this intervention bodes
well for the domestic industry in the
long-term, in the short-to-medium term,
steel producers will continue to face
inadequate availability of domestic iron
ore and may have to import for meeting
their requirements. India’s steel-making
capacity is slated to cross 100 mt in
2013 which will require about 160-170
Singapore’s leading bankers, FIIs, mutual
funds and private equity firms, the sources
said.
Meetings with people based in Singapore
dealing in coal for the steel sector was also
fixed up.
India’s steel capacity is projected to
grow to 200 mtpa by 2020, calling for an
investment of $110 billion in the next six-
seven years.
mt of iron ore. However, there could be
a shortage of about 30 mt given the on-
going challenges in the mining sector.
A negative outlook may arise
from continued weak macroeconomic
environment in India which could
adversely affect financial and liquidity
profiles of issuers beyond that expected
by the agency. Positive rating changes
are unlikely in 2013, with India Ratings
being more likely to take rating actions on
a company-basis rather than on the sector
as a whole.
In line with India Ratings’ expectations,
most of the issuers’ credit profiles, though
weakened in 2012, remained within the
rating categories. Steel producers’ margins
in 2012 contracted due to high input cost
driven by high raw material prices and
the depreciating rupee. In 2012, due to
greater-than-expected liquidity issues and
high leverage, India Ratings took negative
rating action in two cases and the outlook
on two issuers was revised to Negative.
However, the agency upgraded the ratings
of two issuers and an issuer’s Outlook was
revised to Stable from Negative due to an
improvement in credit profiles.
India Ratings-rated steel producers
include Steel Authority of India Limited
(‘IND AAA’/Stable), Tata Steel Limited
(‘IND AA’/Negative), Rashtriya Ispat
Nigam Limited (‘IND AA’/Stable),
Uttam Galva Steels Limited (‘IND A’/
Negative), Usha Martin Limited (‘IND
A+’/Negative).
SAIL chairman C.S. Verma had earlier
said India needs to put in place a funding
agency only for the steel sector, on the lines
of Power Finance Corporation.
The working group on steel industry for
the Twelfth Plan, which pegged `2.5 lakh
crore investment in the sector up to 2017
for adding 60 mtpa capacity, had also raised
concerns about the means of funding in the
sector. 
Steel Insights, February 2013 41
 Corporate

Steel production

JSW expects steel demand Product 9M FY’13

(in lakh tons)

9M FY’12 Growth

to grow in 2013-14
Crude Steel 64.08 53.62 20%
Rolled
46.32 38.72 20%
Products: Flat
Rolled
13.63 10.57 29%
Products: Long

The company achieved crude steel

production of 64.08 lakh tons in the first
nine months of 2012-13, showing a growth
of 20 percent over the corresponding period
of last year.

Steel Insights Bureau
from Asia, North America and Russia, while
contraction was reported in Europe, the
Projects on schedule
JSW Steel’s New Cold Rolling Mill
(CRM-2) Phase 1 and Phase 2 projects at
Vijayanagar are progressing satisfactorily
and will be completed during 2014-15, the
company said in a release.
Non-Grain Oriented Electrical Steel
project has been taken up for implementation
and is expected to be completed in FY2015,
the release said.
Expansion and debottlenecking of
coated products facility in Maharashtra from
current capacity of 0.925 mt to 1.2 mt will
be completed in first quarter of next financial
year, it added.

T
he Indian economy has bottomed company said.
out and is expected to turn around in “Global steel demand is expected to grow Iron ore availability
2013-14 to stimulate steel demand by 3.2 percent in 2013, with raw material
JSW Steel expects availability of iron ore in
growth, while imports, mainly from FTA prices to be less volatile,” it added. the next financial year will be in the range
countries, remain a concern, JSW said in a of 19 to 21 mt while the steel industry in
statement. Crude steel production Karnataka requires 30 mt.
“Pragmatic policies on iron ore mining, JSW Steel Limited reported a 8 percent growth “However, the company is exploring the
speeding up of infrastructure projects and in crude steel production in the third quarter possibility of using dumps with very low
expected interest rate cut by RBI will boost of 2012-13 compared to that of corresponding quality,” JSW said in a statement.
demand for steel,” the company said. period of last fiscal
Global economy is expected to grow by year.
3.5 percent in 2013. The world crude steel The capacity
production for 2012 was 1,548 million tons utilisation was
(mt), a growth of 1.2 percent coming mainly lower during the
Crude steel production third quarter
(in lakh tons) of 2012-13 as
compared to
Product Q3 FY’13 Q3 FY’12 Growth
second quarter
Crude Steel 20.94 19.39 8% of 2012-13 due
to inadequate
Rolled Products:
Flat
15.69 13.87 13% and poor quality
of iron ore
Rolled Products: available through
4.83 3.7 31%
Long
e-auction.

42 Steel Insights, February 2013

Corporate
Performance highlights: Standalone (Growth y-o-y)
Products Q3 FY’13
Crude Steel Production (in MnT): 2.09
Sales (in MnT):
- Semis 0.08
- Rolled: Flat 1.66
- Rolled: Long 0.43
Total Saleable Steel (in MnT) 2.17
Net Sales Value ( `crores) 8,275
Operating EBIDTA ( `crores) 1,314
Profit after tax ( `crores) 137
“Non-availability of iron ore and poor
quality of ore impacted the productivity
by 20 percent. Most of the sponge iron,
pig iron and pellet plants in the state of
Karnataka are either closed or operating at
around 20 percent capacity. Integrated steel
players capacity utilisation is at around 70
percent,” JSW said.
The stock piles of 25 mt ore more or
less were auctioned but NMDC is not able
to produce even after lapse of 17 months
from the date of permission by Supreme
Court, 1 mt of iron ore per month, it said.
So far, only six mines of Category
‘A’ resumed operations when Supreme
Court approved resumption of mining
in Category ‘A’ in September 2012.
These mines produced 0.71 mt so far
but produced ore is not put to e-auction.
On this backdrop, the company expects
improvement in availability of ore as the
balance stock pile of around 1 mt would be
auctioned.
“Besides six mines, balance four mines
of Category ‘A’ will also resume production
in Q4 FY’13 and all these mines together
are permitted to produce 5 million tons per
annum (mtpa),” JSW said.
The company expects that Supreme
Court will consider resumption of mining
in Category ‘B’ mines with permitted
production of 6 mtpa. NMDC is expected
to enhance production to 8 to 10 mtpa,
JSW said.
The recommendation of CEC to cancel
Category ‘C’ mines and auction them to
end users is expected, it added.
9M FY’13
8% 6.41 20%
-25% 0.24 -25%
15% 4.99 19%
18% 1.22 22%
14% 6.45 17%
5% 26,139 16%
5% 4,612 16%
-19% 1,228 41%
Q3 net profit
JSW Steel Ltd reported a 19 percent fall
in net profit to `137 crore for the third
quarter ended December 31, 2012 owing
to low capacity utilisation because of
inadequate availability of iron ore, inferior
quality of ore with low Fe, high alumina
and manganese and unreasonable prices for
iron ore in e-auctions, the company said in
a release.
The turnover and net sales for the
quarter stood at `9,121 crore and `8,275
crore respectively, showing a growth
of 7 percent and 5 percent over the
corresponding quarter of previous year.
The operating EBIDTA for the quarter
is `1,314 crore with a margin of 15.8
percent.
Due to 4 percent depreciation in
the value of the rupee against US Dollar
during the third quarter, the loss of `267
crore on restatement of foreign currency
monetary items at close of the quarter has
been provided. The Company as matter of
prudence also made a provision of `60 crore
towards carrying value of its investment in
US Plate & Pipe mill. Both the items are
considered as exceptional in nature.
The company posted lower capacity
utilisation of 78 percent during the quarter
due to iron ore shortage.
“The availability of iron ore in the next
financial year will be in the range of 19 to
21 mt while steel industry in Karnataka
requires 30 mt. However the company is
exploring the possibility of using dumps
with very low quality,” the release said. 
Essar Ports
commissions 16-mtpa
terminal at Paradip
Essar Ports Limited, one of the leading
private sector ports in India and part of
the Essar Group, has commissioned its 16
million tons per annum (mtpa) dry bulk
terminal at Paradip, taking the aggregate
handling capacity of Essar Ports to 104
mtpa, the company said in a statement.
This terminal is primarily meant to
handle iron ore and dry bulk cargo, the
statement said.
The project involved upgradation and
mechanisation of the existing 230m long
CQ3 berth at Paradip with installation of
a fully mechanised ship loading system
with a capacity of 5,000 tons per hour.
It is an all-weather terminal with
a capability to handle large ships. The
terminal is connected to the stockyard
by a 9km long conveyor system having
a capacity of 5,000 tons per hour. The
stockyard has been equipped with two
reclaimers with a capacity of 2500 tons
per hour each.
“This is our first project on the east
coast of India and is a modern facility with
best in class capabilities,” Rajiv Agarwal,
managing director of Essar Ports Limited,
said, the statement informed.
“The terminal will help achieve better
handling rates, improve efficiencies with
faster turnaround time for ships and
would benefit the Paradip Port and its
customers,” he added.
Paradip Port Trust has granted a
licence to operate the terminal till 2020
with a provision to extend the license
period by further five years.
The terminal will handle iron ore
pellets for its anchor customer, Essar Steel,
which has commissioned a pellet plant
of 6 mtpa and is in advanced stages of
construction of the second unit of 6 mtpa
taking the total pelletization capacity to
12 mtpa. The terminal would also be used
by other users for the movement of their
dry bulk cargos, the statement further
added. 
Steel Insights, February 2013 43
Corporate
Mining impasse hits Sesa
Goa profits
Steel Insights Bureau
I
ron ore miner Sesa Goa Ltd has reported
a 28 percent year-on-year decline in net
profit to `497 crore in the third quarter
of 2012-13 compared with `692 crore in the
same period of the previous financial year
due to decline in sale on ongoing mining ban
in Goa and Karnataka.
The Vedanta Group company’s sales
also plunged 91 percent to `227.54 crore
from `2617 crore in the same period of the
previous fiscal as there was no production
and sale of iron ore during the quarter.
If not for the `669 crore profit coming
in from Cairn Indian, in which the company
holds 20 percent stake, it would have reported
a loss of `172,25 crore, said the company.
Operating performance
Iron ore mining operations in both Karnataka
and Goa continue to remain suspended
due to regulatory restrictions. During Q3,
approximately 0.03 million tons (mt) of
44 Steel Insights, February 2013
iron ore was sold from Karnataka through
court monitored e-auctions. There was no
production or sale of iron ore during the
quarter at the Goa operations, the company
said in a statement.
Government authorities have ordered
suspension of mining operations of all
mining leases in the state of Goa, stoppage
of mining transport across the state and
suspension of environmental clearances in
September 2012.
In October 2012, the Supreme Court
ordered suspension of all mining operations
and transportation of iron ore of the mines
in the state.
As a result, operations at the company’s
mines in Goa remain suspended. The
company has filed an application before the
Supreme Court seeking modification or
vacation of the aforesaid order. The hearing
in the Court is yet to commence effectively.
In Karnataka, the Supreme Court allowed
“A” Category mines to resume mining
operations, in line with recommendations
of the Central Empowered Committee
(CEC), and is in the process of resuming “B”
Category mines including the Sesa Goa mine
in Karnataka.
The CEC has approved the company’s
Reclamation and Rehabilitation plan at
a provisional production capacity of 2.29
mtpa and the company expects to commence
mining in Karnataka, subject to receiving the
court’s and other necessary approvals.
Value addition
Production of pig iron and met coke
increased by 29 percent and 40 percent in Q3
to 82,869 tons and 90,664 tons respectively
as compared to 64,163 tons and 64,671 tons
in the corresponding quarter of the previous
year. The increase is primarily on account of
the commissioning of new pig iron capacity
during Q2 FY2013 (increase of 375 ktpa
taking total capacity to 625 ktpa) and the
associated metallurgical coke capacity. The
new blast furnace operated partially during
the current quarter on account of reduced
availability of iron ore.
Sales of pig iron were lower by 8 percent
in Q3 to 62,258 tons as compared to 68,020
tons during the corresponding quarter of the
previous year due to unfavourable market
conditions while the sales of met coke
increased by 15 percent in Q3 to 79,542
tons as compared to 68,931 tons in the
corresponding quarter of the previous year.
During Q3 and the nine-month (April-
December 2012) period, power sales stood
at 42 million units and 116 million units
respectively.
Power sales are not comparable with
the previous periods in view of GEPL
acquisition in March 2012, and the recent
commissioning of the new 30 MW power
plant.
During the quarter, Sesa Goa acquired
the remaining 49 percent of the outstanding
common shares of Western Cluster
Limited (thereby taking the equity interest
in the project to 100 percent) for a cash
consideration of $33.5 million.
Over 48,000 meters of drilling has been
completed till December 31, 2012 in the
three deposits. The company remains on
track to deliver the first shipment in FY2014,
it added. 
Corporate
Gujarat NRE reports higher
Q3 profit despite sharp fall in
met coke prices
Steel Insights Bureau
G
ujarat NRE Coke Ltd, one of the
largest merchant coke manufacturers
in India, has managed to report
a substantial increase in its third quarter
(October-December) net profit and income
from operations despite sharp fall in revenues
from its steel business.
“The increased income and profit is a bit
surprising because metallurgical coke prices
had fallen significantly since October 2011
from a peak of $410 per ton to recent lows
of around $287 per ton in December 2012,”
industry sources said.
The company had last week reported
a net profit of `20.12 crore for the third
quarter of 2012-13 compared with a profit of
`16.72 crore during the second quarter (July-
September) and a profit of only `1.90 crore
during the third quarter of 2011-12.
The net income from operations during
third quarter of current financial year stood
at `527.11 crore, at `331.83 crore during the
second quarter and at `335.57 crore during
the third quarter of 2011-12.
“The increased profit and income from
operations announced by the company for
the third quarter of 2012-13 came at a time
when the price of met coke had fallen by
nearly 10% during the quarter from a high of
around $320 per ton as on October 1, 2012 to
a low of around $288 per ton as on December
31, 2012,” they said.
The price of met coke was ruling at about
$368 per ton as on July 1, 2012 and were at
their peak of about $410 per ton as on October
1, 2011 and at $363 per ton as on December
31, 2011, according to data available with
ICMW, a high end report on coal.
“The announcement of increased profit
by Gujarat NRE Coke on the back of high
income from operations is amazing, especially
at a time when met coke prices remained
highly depressed and the demand from steel
makers was extremely low,” the sources said.
Surprisingly, with the gradual fall in
market price of met coke and weakness
in demand from steel makers, the income
from operations of Gujarat NRE showed a
contrasting trend, they said.
“When most of the Indian coke makers
were finding it difficult to locate buyers in
the market even at low prices because of not
so encouraging sentiment in steel industry
during the third quarter because of increased
imports of low priced material, the higher
sales and consequently higher profit by
Gujarat NRE is praiseworthy,” they said.
However, a section of other sources
attributed better performance of Gujarat
NRE during the third quarter to its decision
to sell a majority of its products under long
term or quarterly contracts with steel makers.
“The increased income might have
also come from increased production as
the company was working on increasing its
capacity and the new capacities might have
come into operation recently,” the second
section of sources said.
The company, however, did not provide
in its filing to stock exchanges as to how
much coke it had produced or sold during
the third quarter of 2011-12 or in second and
third quarters of 2012-13.
Electrosteel Castings reports net
profit
Electrosteel Castings Ltd has reported a
net profit of `33.09 crore in the quarter to
December 31, 2012 against a net loss of
`10.78 crore in the comparable quarter in the
previous fiscal. In the quarter to September
30, 2012, the ductile iron pipe maker had
posted a net profit of `37.04 crore.
Industry sources said the margins were
still under pressure but selective order
bookings have maintained the revenue levels.
Current order booking was worth six
months’ production. Around 60 percent of
the company’s revenues come from exports,
mainly to Europe and the Gulf region.
Electrosteel has presence in UK, France,
Spain, Italy, Germany, Jebel Ali, Qatar,
Morocco and South Africa.
Steel Insights, February 2013 45
Corporate
Bhushan Steel Q3 net down 20%
Bhushan Steel
reported a Indian
20 percent
decline in
net profit
at `221.20 crore for the quarter ended
December 31, largely due to subdued
sales growth and rise in interest payments.
The company had reported a net profit
of `276.62 crore during the corresponding
quarter of the previous fiscal.
Net sales of the company was up
marginally by 5 percent to `2,529.07 crore
during the quarter vis-a-vis `2,407.06
crore of the October-December quarter
of the previous fiscal, it said in a filing to
the National Stock Exchange (NSE).
Besides, its interest costs increased
by nearly 28 percent to `293 crore, while
company’s expenditure was up 6.54
percent to `1,954.68 crore.
In its filing, the company also said its
Board has approved capacity expansion
projects worth `7,560 crore in Odisha.
“The Board has approved setting up
a 0.35 million tons per annum (mtpa)
capacity cold rolling cum electrical steel
(CRNGO) complex at estimated project
cost of `1,560 crore and reaffirming the
proposal to set up a 1.8 mtpa capacity
pickling Line coupled with Tandem
Cold Rolling Mill (PLTCM) at
estimated project cost of `6,000 crore, at
Meramandali plant in Odisha,” it said.
With installation of these facilities, the
company’s total downstream production
capacity is proposed to increase to about
4 mtpa by 2016-17, it added.
46 Steel Insights, February 2013
IMFA posts 14.43% rise in Q3
net profit
Metals
& Ferro Alloys
Ltd (IMFA), the
country’s largest
integrated producer of value-added ferro
chrome has posted a 14.43 percent rise in
net profit `15.06 crore during the third
quarter ended December 31, 2012 up
from a profit of `13.16 crore in previous
corresponding period.
During the third quarter of FY13, the
company’s revenues went up marginally
to `311.50 crore from `306.30 crore.
However, exports declined to `225.32
crore in the quarter under review against
`241.49 crore in the same period last year.
IMFA also commissioned Unit 1 (60
MW) of its proposed 120 MW captive
power plant on December 31, 2012. The
company also achieved the highest ever
monthly production of 4,158 tons from
the furnace dedicated to the Posco JV.
Tata Sponge Q3 net up 22.57%
Tata Sponge Ltd, an
associate company of
Tata Steel, reported a
22.57% jump in its net
profit to `20.58 crore
for the quarter ended December 31, 2012
largely on account of higher sales compared
with net profit of `16.79 crore during the
same quarter of the previous fiscal.
Net sales of the company was up
nearly 55% to `196.25 crore during the
quarter compared with `126.65 crore of
the same quarter of the previous fiscal. 
Huge steel sales
potential in rural India:
SAIL chairman
With per capita consumption of steel at
a level of only 15 kg in rural India, a vast
potential exists for steel marketers to enhance
sales in the segment, C.S. Verma, chairman,
Steel Authority of India Ltd (SAIL) said
while reviewing the performance of the
eastern region sales force of the company’s
Central Marketing Organisation (CMO).
Verma pointed out that with rural
incomes rising in recent years and aspirations
of the rural populace changing in tandem,
strengthening of retail marketing has
become imperative to retain the company’s
market leadership.
At present SAIL has a countrywide retail
network comprising around 2,400 dealers
at the district level and around 500 dealers
at the taluka/block level. Verma urged his
marketing executives to attain higher peaks
of achievement by strengthening customer-
centric efforts including customisation of
products.
Drawing attention to the array of
new products that would come into the
market upon completion of SAIL’s massive
modernisation and expansion programme,
currently under implementation, he stressed
on further consolidating the company’s
market leadership through provision of
more value added products and services. 
Corporate
SAIL Apr-Dec steel
production rise marginally
Steel Insights Bureau
T
he Steel Authority of India Limited
(SAIL) has recorded 2 percent growth
in hot metal production during
the first nine-months (April-December)
of 2012-13 compared with corresponding
period of 2011-12. The growth in crude steel
production and saleable steel production
was 1 percent and 2 percent respectively, the
company said in a release.
The production of hot metal during the
first nine-month stood at 10.7 million tons
(mt) and that of crude steel at 10.09 mt while
production of saleable steel stood at 9.25 mt.
The company’s saleable steel production
till November was 8.2 mt, which means its
production of saleable steel stood at 1.05 mt
in December.
On techno-economic parameters, the
company managed to improve its energy
consumption and blast furnace productivity
by 3 percent each, while power generation
during the nine-month period increased by 5
percent compared to previous financial year.
The release said that during the first
nine-months of 2012-13, Bhilai Steel Plant
(BSP) of the company supplied special soft
iron magnetic plates for the prestigious
India-based Neutrino Observatory (INO)
project of Bhabha Atomic Research Centre
(BARC), while Bokaro and Salem plants
started production of IS 2062 E450 and E350
HR Coils tailor-made for Indian Railways.
In fact, SAIL’s Bhilai Steel Plant (BSP)
has registered growth of 4.1 percent, 5.3
percent and 5.3 percent in hot metal,
crude steel and saleable steel production,
respectively over the corresponding period in
last fiscal year.
The plant produced 3.98 million tons
(mt) of hot metal, 3.83 mt of crude steel
and 3.32 mt of saleable steel during the
nine-month period. The plant’s iron ore
production was 4.1 percent higher than the
same period last year, it said in a statement.
For the nine-month period of from
April to December 2012, the plant recorded
its best ever production of 117,300 tons of
high tensile plates for home sales as against
previous best of 107,300 tons in April to
December 2008, best ever loading of 109,200
tons of long rails as against previous best of
99,400 tons in April to December 2011 and
best ever labour productivity of 331.4 tons/
man/year as against previous best of 322.6
in April to December 2010. In production
of wire rods and light structural, the plant
recorded growth of 10.5 percent and 54
percent, respectively.
Hajigak project
The Indian consortium led by SAIL which
had successfully bid for Afghanistan’s
Hajigak iron ore concession, is at the final
stage of signing agreement for the project,
Afghan mines minister Wahidullah Shahrani
said.
Speaking recently at the sidelines of the
11th International Mining & Machinery
Exhibition (IMME) in Kolkata, the minister
said that the SAIL-led consortium, AFISCO
(Afghan Iron and Steel Consortium) is
expected to sort out soon the issues raised
over some conditions put in the agreement.
As per the agreement, the consortium has
to start mining within six months of being
granted the licence or face cancellation of
licence. There is also a condition restricting
ore exports from the project.
“These things have been raised during
the negotiations and negotiations are moving
on. I don’t see any major difficulty in moving
forward,” the minister said.
He further said that in 10-12 years, the
investment in the project would be around
$10-15 billion, which would be one of the
biggest single project investments by India
abroad.
Meanwhile, another Indian consortium
including Hindustan Copper and Nalco has
shown interest for Shaida copper deposit
project, the minister said. The bids will be
opened “pretty soon, in a matter of days,” he
added.
Mushroom design dome at BSP
As an active step towards upgrading the
facility, SAIL’s Bhilai Steel Plant (BSP) has
installed a ‘mushroom dome’ on the second of
the three hot stoves of the upcoming furnace.
The dome was successfully erected on Stove
No. 2 on November 29, 2012, the company
said in a statement.
The erection of dome on Stove No. 1
was done on October 7, 2012. The domes of
stoves in BF#8 area have a unique mushroom
design to take care of thermal stresses as a
result of higher dome temperature. A state-
of-the-art technology being introduced for
the first time in BSP, the Mushroom design
of dome helps in achieving longer campaign
life of stoves, the statement added.
The dome, weighing about 100 tons, was
assembled outside and placed in position as a
single piece on top of the stove at a height of
39 meters. With placement of the dome, the
total height of stove increased to 45 meters.
The erection activity executed by L&T was
done under the supervision of Blast Furnace
Zone of the Plant’s Project Department.
Centre of Excellence
Besides focusing on production and
upgradation process, this leading steelmaker
has also inaugurated a new Centre of
Excellence at Steel Authority of India
Limited’s (SAIL) Bhilai Steel Plant (BSP).
This new Centre of Excellence was
inaugurated at BSP’s Research & Control
Lab building by C.S Verma, chairman of
SAIL in presence of functional directors of
SAIL and CEOs of different SAIL plants
who had converged in Bhilai for the 55th
Joint Meeting of Production and Productivity
Committee of SAIL. The programme was
also attended by senior officers of BSP on
January 21, 2013, the statement said.
The setting up of the new complex is part
of SAIL’s research & development master
plan that envisages creation of Centres
of Excellence (COEs) at the individual
steel plant level which would primarily
focus on various product development and
improvements in collaboration with key
customers and technology suppliers. 
Steel Insights, February 2013 47
Corporate

Tata Steel annualised crude New portal version

steel production likely at

Tata Steel launched a new version of
its online portal-Valueabled.com at the
Jaipur Literature Festival.
Valueabled.com, with a tagline of

8.35 mt in 2012-13 ‘values stronger than steel’, is an online

Steel Insights Bureau
achieved its best ever quarterly production at
0.109 mt against its previous best of 0.108
extension of TATA Steel’s sustained
campaign to inspire the youth to
embrace a value driven society. It gives
an opportunity to the country’s youth to
be inspired, motivate others, encourage
change and stand up for values one
believes in.
Partha Sengupta VP raw materials
and CSI of Tata Steel said that
“Valueabled.com is a unique platform that
aims to instill the importance of modern
day values in the youth of the country
and encourages them to participate in
the nation building process. The new
Valueabled.com has been enriched with

T
ata Steel Ltd has ramped up its mt in Q3 FY2005. The Merchant Mill also
production in the third quarter of achieved its best ever quarterly production at
2012-13, to reach an annualised run 0.104 mt against its previous best of 0.103 mt
rate of 8.35 million tons (mt) of crude steel in Q2 FY2013.
production, the company said in a statement. The company also achieved its best ever
The company reported crude steel flat product sales at 1.087 mt in a quarter
production of 2.09 mt in the third quarter against the previous best of 1.008 mt in Q2
of 2012-13, up 8.29 percent from crude steel of FY2013. During the period, Tata Steel
production of 1.93 mt in the second quarter commissioning of Lime Kiln # 8 & 9 and
of the current fiscal. Saleable steel production coke battery # 10 in December 2012.
was 2.07 mt in the third quarter of 2012-13,
Production and sales
up 10.7 percent over saleable steel production (In ‘000 tons)
of 1.87 mt in the second quarter of the
Quarterly YTD
current fiscal.
Sales during the third quarter of 2012-13 Items Apr –
Q3 Q2 Q3
Dec
stood at 1.89 mt, up 9.25 percent over current FY’12 FY’13 FY’13
FY’12
fiscal’s second quarter sales of 1.73 mt.
In the April-December period of 2012- Hot Metal 1902 2070 2276 5791
13, crude steel production rose 10 percent Crude
1766 1927 2087 5302
to 5.83 mt from 5.30 mt in the same period Steel
last year. Saleable steel production rose 9.36 Saleable
1732 1869 2069 5192
percent to 5.68 mt in the April-December Steel
period of 2012-13 from 5.19 mt in the same Sales 1622 1730 1887 4864
period last year. Sales during the April-
December period of 2012-13 stood at 5.20 Q3 results
mt, up 7 percent from 4.86 mt in the same Tata Steel Ltd’s board of directors will meet
period last year. on February 13, 2013, to consider and take
The major highlights during the on record the audited standalone financial
third quarter of 2012-13 included LD#1 results and unaudited consolidated financial
achievement of its best ever quarterly results for the quarter and nine months
production at 0.828 mt (previous best 0.819 ended December 31, 2012.
mt in Q2 FY2013). The Wire Rod Mill According to analyst estimates, the
new and special features to make it more
attractive and user friendly. And to make
it more accessible, we have also launched
a mobile app ‘Values in Action’. We
look forward to seeing exchange of new
ideas and thoughts on the platform, and
utilising it as a tool to bring about youth
awakening.”
A debate section and a ‘Talk the Talk’
section have also been included. These
are held periodically on Google hangouts
and often feature celebrities, industry
experts and motivational personalities,
the company said.
Apr
- Dec
company is expected to report a consolidated
FY’13
net profit of `683 crore, while the net sales
6400
would be around `38,228 crore.
Analysts expect the muted growth
5832
because of low demand and prices in most
5678 part of the third quarter even as prices of
raw materials like coking coal and iron ore
5203 remained stable.
Going forward in the fourth quarter of
2012-13, however, steel firms may see some
pick up in consumption as prices firmed
up from December onwards. However, the
spot iron ore prices are expected to rise in
the fourth quarter even as the coking coal
contract for the fourth quarter settled at $165
per ton compared to $170 per ton in the third
quarter.  

48 Steel Insights, February 2013

Corporate

Boiler-6 of CPP

RINL lights up ignition According to information available with

Steel Insights, RINL has lighted up Boiler
No. 6 of its proposed coal and blast furnace

furnace at Sinter Plant No. 3 gas based captive power plant (CPP). With
an estimated expenditure of `339 crore, the
lighting up the boiler is a major milestone
in the enhancement of captive power
generation, the company said in a release.
RINL chairman and managing director
A.P. Choudhary said, “The commissioning of
Boiler-6 will help in meeting the requirement
of expansion significantly as the company
is putting all efforts to increase its power
generation to meet its requirements and also
to reduce its dependence on the state grid.”
The boiler, which will generate steam of
330 tons per hour, can operate either with
100% coal or with blast furnace gas and coal in
the ratio of 50:50 for generating steam at rated
capacity. On January 3, RINL had announced
commencement of structural erection work,
equipment erection of boiler and other civil
AP Choudhary, CMD unveiling the plaque to mark the inauguration of Sinter Plant 3. works at the CPP as part of increasing its
steel-making capacity to 6.3 mtpa. 

Steel Insights Bureau

RINL raises product prices by `500/ton

A
chieving a major milestone in the
commissioning of the state-of-the-
art Sinter Plant - 3, the Rashtriya Rashtriya Ispat Nigam Ltd (RINL) has increased prices of its steel products by around
Ispat Nigam Ltd (RINL) said it has lighted `500/ton in January 2013. The move was led by expectations of an improvement in
the ignition furnace of the 3.6 million tons the overall steel market with signs of increased demand and a firming up of domestic
per annum (mtpa) plant. and global steel prices. RINL has registered a growth of 15% and 5% in sinter and iron
“The Ignition Furnace of Sinter Plant No. and steel production respectively.
3 was lighted up by chairman and managing Sinter production stood at 528,000 tons and was the best ever monthly production
director A.P. Choudhary on January 8,” the achieved since the plant’s inception. Saleable steel production of 270,000 tons was the
company said in a release. best achieved in the current financial year, the company said. In order to overcome
Earlier on January 3, RINL had flagged the crisis due to the power shortage in, RINL is focusing all efforts to increase its
off erection works of Oxygen Pressure captive power generation. The plant registered a growth of 2% in December. Prices for
Reducing Station (PRS) for Steel Melt representative steel products for January 2013.
Shot-2. The sinter plant is being constructed Rs/ton
by RINL at a cost of `750 crore. The new Sl. No. Item Grade
VZG LUD CNI MUM CAL
sinter plant would help RINL to increase
1 Billet 125x125 mm IS 2830 37600 41200 39550 41200 39850
production from its Blast Furnace -3 besides
2 Channel 200x75 mm IS2062 Gr.A 46050 46400 46750 45100 45850
reducing cost of production through energy
efficient ways. 3 Rebar 8mm IS1786 Fe500D 45550 46000 46550 45850 45950
The sinter plant was supplied and 4 Round 20.64 mm 55Si7 49150 49300 49250 49300 49250
erected by a consortium of TPE (Russia), 5 Round 40mm SAE1018 43200 42650 43600 43075 43000
while Dastur & Co and McNally Bharat 6 Wire rod 7 mm PC115 45000 45500 45250 44650 45150
Engineering Ltd provided consultancy
7 Wire rod 8 mm EQ 44950 45450 45200 44550 45100
services. Siemens, UKG of Russia, Armoto
Yunz, Siemens Vie, Alstom India, Voltas, 8 Pig Iron LSB 25281
Burner Center and GDC Ltd were involved The above prices are Branch Level Prices incl. ED/cess and excl. VAT/CST, etc.
in the commissioning.

Steel Insights, February 2013 49

 TECHNOLOGY
Danieli Wean United cold rolling mills & processing lines
Winning combination in flat
products equipment
Process section of a Continuous Pickling Line
Sanat Bhaumik
T
he whole of steel world is today
looking mainly to India where huge
investments have been announced
for capacity expansion of all major existing
plants and installation of new plants. This
also leads to installation of state-of-the-art
new rolling mills and strip processing lines
as well as upgradation and modernisation of
existing mills.
With the purchase of United Engineering
on January 1, 1995, Danieli completed
its strategic acquisitions of assets and
technologies for flat products in the US. This
route began in 1991 with a joint venture with
United Engineering, followed by another
joint venture with Wean industries in 1992
and acquisition of the later in 1993.
The merger of this centennial design
experience with the most advanced R&D
activities and a front running attitude led
Danieli Wean United (DWU) to become
the most innovative company in flat products
50 Steel Insights, February 2013
equipment since the beginning. This front
running spirit and the experience enables
DWU to design and supply any kind of
equipment in flat hot and cold rolling and
processing, such as:
♦♦ Hot Strip Mills (HSM)
♦♦ Thin Slab Casting and Rolling plants
(TSR, fTSR, QSP & ETR)
♦♦ Plate Mills including all plate finishing
lines
♦♦ Steckel Mills for strip and plate
production plants
♦♦ Cold Rolling Complexes
♦♦ Tandem and Reversing mills for cold
rolling
♦♦ Pickling lines for carbon and stainless steel
♦♦ Electrolytic Tinning Lines
♦♦ Galvanising Lines
♦♦ Annealing Lines
♦♦ Colour Coating Lines
♦♦ Skinpass Mills for hot and cold
applications
DWU specialises in supply of
trendsetting technologies and equipment
for flat products production, from caster to
hot mills to cold rolling mills and processing
lines. In this paper, efforts have been made
to highlight some of the special features and
recent installations of DWU for cold rolling
mills and processing lines.
Cold Strip Mills
DWU is recognised globally as a leader for
engineering and manufacturing of complete
cold mill complexes for carbon and stainless
steels. Starting from hot-rolled coils, DWU
processing lines and cold mills are able to
produce finished products more than 2
million tons per annum (mtpa) depending on
the product mix, meeting the requirements
of the most demanding markets, such as
automotive industry both for exposed and
non-exposed parts, white goods, packing
and construction. All DWU processing
lines and cold mills have reached their target
performances in extremely short time after
Single Stand reversing cold mills
Technology
Pickling section of a DWU PLTCM
startup, granting the customers a very fast
return of investment.
DWU offers a full range of tandem
rolling mills to process materials up to a
maximum thickness of 6.5mm from “coil to
coil” to “continuous” type for the production
of sheet material in order to fulfill the highest
customer’s requirements. 4-high or 6-high
mill stand configurations are provided
with the latest technology for thickness
and flatness control, and excellent strip
surface quality. They also ensure achieving
a final product with the required mechanical
properties at the lowest investment costs
without compromising the product quality,
for medium and large production volumes
and varieties.
DWU has reference installations of 106
cold strip mills totalling over 1000 stands in
the following areas:
♦♦ Tandem Mills and CTCM (Continuous
Tandem Cold Mill)
♦♦ PLTCM (Pickling line and Tandem
Cold Mill)
♦♦ 2-stand Reversing Mills
♦♦ Single stand
Reversing Mills
♦♦ Hot Skin Pass Mills
♦♦ DCR Double
Reduction Mills
♦♦ Temper Mill
♦♦ C o m b i n a t i o n
Reduction Temper
Mills
♦♦ Stand alone Skin
Pass Mills
♦♦ Inline Skin Pass
Mills
DWU tandem cold mills can be provided ♦♦ T he total stroke for intermediate roll
for conventional, continuous, and pickle shifting will be + 200mm with DWU
line coupled applications for production OSRT (Optimised Shaped Roll
capacities of up to 2,200,000 tons per annum technology)
(tpa). Regardless of the configuration, ♦♦ Shifting of counter intermediate roll
DWU mills are provided with state-of- developed by Danieli & C in joint
the-art gauge and flatness controls for the cooperation with Yanshan University.
production of commercial and exposed sheet
products as well as tin plate. Depending
on the product mix and mill configuration,
DWU reversing mills (one or two stands) are
capable of producing 150,000 to 1,000,000
tpa of commercial, exposed application and
tin plate products.
Danieli cold mills are supplied with 4hi,
6hi, 18hi and 20hi configurations. The 4hi
and 6hi mills are equipped with Optimised
Shape Roll Technology (OSRT).
The New Danieli 6-high 3C mill concept
allows a superior range of control range with
an original design for roll crossing in a stand
of six-high configuration. The operational
flexibility and favorable distribution of
forces specific to the Danieli 6-high 3C
mill allows rationalisation in the use of the
stand actuators resulting in lower production
and maintenance costs and improved plant
efficiency.
The 6hi technology of Danieli Hot Skin Pass Mill
incorporates the following major features in
the mill:
♦♦ Work Roll and Intermediate Roll Hot Skin Pass Mills
bending Today’s demanding market is pushing
♦♦ Bending blocks are provided for both steel strip processors to a new high. The
positive and negative bendings requirements for steel strips are of reliable
♦♦ Positive bending max 720KN (per each consistent quality at competitive price. This
roll neck) market demand leads to development of
♦♦ Negative bending max 720KN (per each newer grades of material at competitive cost.
roll neck) To minimise the overall cost of production
♦♦ Work Roll and Intermediate Roll shifting for the end users, wherever possible they
would prefer to use hot rolled coils over cold
rolled coils. This necessitates production of
hot rolled coils with tighter tolerances and
much better surface finish.
For example, the use of hot rolled strip
for pressed components and tube making has
initiated requirement of good shape, yield
point suppression and specific texture. In the
hot rolling process it is not possible to control
these parameters due to the fact that rolling
takes place at higher temperatures. However,
the end products from hot skin passing are
produced at ambient temperature where the
TCM section of a DWU PLTCM properties of material are different than at
elevated temperature.
Steel Insights, February 2013 51
Technology
To meet the continuously increasing
demand for higher quality hot rolled coils
by the end users, the hot skin-passing is now
widely accepted as the means of improving
shape and properties of hot rolled coils
especially with respect to strip flatness,
elongation and surface roughness. Hot rolled
coils from conventional hot strip mills or thin
slab casting and rolling plants need further
processing like recoiling and skin passing to
reduce the rejection rate.
When the strip is used to produce pipes,
pressed steel components, etc. its use is
beneficial to increase quality and reliability
of the end product. With a large reference
of Hot Skin Pass Mills worldwide, Danieli
is able to supply high quality and state-of-
the-art plants to meet the present and future
requirements of the ever changing market
demand.
Pickling Line coupled with Tandem
Cold Mills (PLTCM)
Continuous pickling line coupled with
tandem mill provides significant quality,
productivity, yield, and cost advantages,
eliminating intermediate storages for pickled
coils and the necessity of strip threading
for each coil entering tandem mill. The
combination of these two lines is a mix of
high efficient features.
The innovative design for high-speed
(400 mpm) Turboflo® pickling process
section makes DWU continuous pickling
lines the fastest lines worldwide. 4-high
and 6-high mill stand configurations ensure
excellent quality results in terms of flatness
and thickness control. Continuous process
eliminates the necessity to thread the strip
head end between two consecutive coils
resulting in higher line productivity, reduction
PLTCM – Pickle Line coupled Tandem Cold Mills
52 Steel Insights, February 2013
of off-gauge material and
reduction of coil handling.
Pickling Lines (PPPL/
CPL)
Danieli’s solution for the
pickling lines includes Push-
Pull Pickling lines (PPPL),
standalone Continuous
Pickling Lines (CPL) and
Continuous Pickling Section
as a part of PLTCM. For
such Pickling lines, DWU
has an impressive reference
list of 103 installations.
A Push-Pull line can
handle a wider range of
products than continuous lines - both heavy
and light gauge, high carbon and mild steel,
and high strength low alloy (HSLA) steel.
For these reasons, as well as their lower cost,
these are mostly favoured by customers in
the secondary steel plants. However, these
Push-pull lines also have applications in
major steel plants, where they can be used
to complement continuous, high production
units or to replace older, less productive lines.
A recent DWU push-pull line uses
Turboflo® pickling process, which removes
the oxide layer very effectively, for unmatched
cleanliness on strip surfaces and edges. A
two-high temper mill improves strip shape
and further enhances the breakup of oxide
scale for faster pickling process.
Several units provided can be moved in
and out of the line: a dry lube system that
applies protective coatings and press working
lubricants, a slitter capable of making up to
seven cuts depending on gauge and yield
strength, and an adjustable-width side
trimmer for fast width changes. A turret type
General view of a DWU Pickling line
recoiler eliminates time-consuming in-line
banding. Such lines can be designed for an
all-in-one workhorse that is engineered to
deliver higher product yields.
A standalone Continuous Pickling Lines
(CPL) or the Continuous Pickling Section
as a part of PLTCM will consist of a double
pass entry section, Laser or Flash-Butt welder
for strip joining, six-strand entry horizontal
accumulator, scale breaker (tension leveler),
pickling section, exit strip accumulator, side
trimmer, etc. All pickling lines supplied by
DWU presently are provided with Turboflo®
which has the following advantages:
• Turboflo® can process the light
gauge strip (0.7/0.8mm) at speeds
up to 400mpm without concern for
maintaining emersion, as this system
offers a flat, straight through strip pass
line.
• Turboflo® offers the shortest possible
pickling system to meet the established
parameters for the pickling line.
• Because of the low volume of pickle
liquor contained in the line pickle tanks,
the total tank can be quickly drained for
any situation.
• Because the need to control strip tensions
for catenary is eliminated, high tensions
can be utilised through the pickling
section which results in excellent strip
tracking and less total horsepower
required.
• Turboflo® is very thermally efficient and
keeps hot fresh pickle liquor in contact
with the strip surface at all times.
• Turboflo® provides total isolation of the
pickle liquor from tank to tank.
Technology
• T he unique cover design eliminates the
surge of fluid due to high strip speed
toward the exit end of the tanks.
• The special cover design also captures the
surging of the pickle liquor due to the
high speed of the strip and re-circulates
this pickle liquor to achieve more
turbulence. The higher the strip speed,
the greater the pickle liquor turbulent
action becomes.
• Turboflo® eliminates the high surging
of pickle liquor due to the high speed
operation. Consequently, it does not
place the wringer rolls under any high
fluid pressure. Therefore, the sealing of
the wringer rolls is greatly simplified and
maintenance is significantly reduced.
Galvanising Lines (HDGL)
DWU is a world leader when it comes
to designing and manufacturing quality
galvanising lines (more than 105 galvanising
lines supplied since 1948). DWU experience
in galvanising extends to 35 countries, over six
continents. DWU builds lines that can meet
the most stringent galvanising specifications
with strip widths up to 72 inches (1830mm)
wide and beyond.
These galvanising lines produce coated
strips for use in automobiles (Galvanised/
Galvannealed), appliances, home-building,
building products (Galvanised/Galvalume),
and many of today’s demanding products.
Coils can be produced in a wide range of
properties that include ductility, coating
weights, and surface treatment. Because
of this experience, DWU produces more
galvanising lines than all their competitors
combined.
As a world leader, DWU holds the
records for many firsts in galvanising lines,
some of which are:
♦♦ First Cook-Norteman Lines
♦♦ First Dedicated Zinc-Aluminum Line
♦♦ First Minimum Spangle Coating
♦♦ First Moveable Coating Pots
♦♦ F irst Steam/Air
Knives to Replace
Rolls
♦♦ First High-Speed
Scrap Bailers
♦♦ First Strip Side-
Notchers
Continuous
Annealing Lines
(CAL)
The continuous
annealing process
represents the
ideal solution for
processing cold rolled Annealing furnace of a CAL
strip (ranging from
commercial quality
to high-strength steel) and black plate • Heating section,
with high production rates, high yields and • Soaking section,
substantial energy savings with respect to • Slow cooling section
batch annealing process. DWU’s history of • Fast cooling section,
more than 30 annealing lines ensures top
• An overaging section
material qualities and high process flexibility
• A controlled cooling section
for the production of a broad range of steel
grades and dimensions. Excellent annealing
Brief details of the two most recent
results, in the automotive sector especially,
Continuous Annealing Lines (CAL) for
are achieved thanks to fully automated
automotive/appliances quality strips are as
temperature control, specific annealing cycles
follows:
and rapid cooling system.
Customer – Usiminas (Brazil): Start up
The present generation CALs for
year 2000, strip thickness: 0.4 – 2.3 mm,
autobody quality strip production will
maximum strip width: 1865 mm, Grades:
generally consist of coil receiving ant entry,
HSS/automotive, Furnace capacity: 220
a double pass entry section, welder for strip
mpm, production 147 tph (Furnace supplier:
ends joining, vertical looper, electrolytic
Nippon Steel)
cleaning section, annealing furnace, exit
vertical looper, skin pass and tension leveling Customer – I/N Tek (USA): Start up
section, horizontal and vertical inspection year 1990, strip thickness: 0.4 – 2.0 mm,
station, coiling section followed by coil maximum strip width: 1650 mm, Grades:
delivery system. appliances/automotive, Furnace capacity:
At present, DWU has an exclusive 450 mpm, Annual production 900,000 tpa
alliance agreement with Ebner, Austria for (Furnace supplier: Nippon Steel)
Automotive CAL furnaces. Such annealing
furnaces have very sophisticated and fully Colour Coating Lines (CCL)
automatic following heating and cooling DWU colour coating lines respond to the
zones to achieve the mechanical properties: growing demand for pre-coated sheets with
• Pre-heating section, high throughput rates and top product
Galvanising and colour coating line at Marcegaglia, Italy
Steel Insights, February 2013 53
Technology
Exit Vertical Looper of a Colour
Coating Line
Coating section of a DWU CCL
quality. They continuously coat hot rolled,
cold rolled and galvanised steel strips with a
variety of coatings in an almost endless array
of colors, patterns, and textures, and can be
supplied as stand-alone lines or combined
with in-line galvanising process. The
coatings are precisely applied through roll
coating machines on both sides of the strip
that can be coated simultaneously with either
the same or different type of coating.
The typical configuration with separate
coaters with quick color change feature
and two ovens allows maximum flexibility
in applying one or two coats on each side
of the strip. Further highlights of Danieli
technology are high flexibility for processing
different strip dimensions and coating
compositions, precise coating thickness,
special design and control of curing ovens
for high efficiency, excellent quality and
enhanced environmental solutions.
DWU has supplied 26 Colour Coating
lines since 1962. The most recent installation
is the state-of-the-art galvanising cum high-
speed painting line for the production of
Finished coil from a DWU PLTCM
54 Steel Insights, February 2013
galvanised and
painted coils at
Marcegaglia’s
Ravenna Plant in
Italy.
This 350,000
tpa (150,000 tpa
painted coils)
line will process
strips up to
1550mm width
in the thickness
range of 0.4 to
1.4mm. The
major advantages
of such combined
line are the low investment costs, high
production flexibility (producing either only
alvanized, or alvanized and color coated), low
operating costs (less coil handling, packaging,
degreasing, manpower needs), installation
cost reduction, and lower environmental
impact.
Electrolytic Tinning Lines (ETL)
DWU tinning technology is characterised
by either tinning or chromium plating or a
combination of both. Tin plate is mainly used
in the packaging industry for its excellent
corrosion protection, appearance, strength,
light weight, formability and resistance to
attack by organic substances both for food
and non-food packaging products.
The long experience of more than 100
projects, both for new lines and revamping
activities, guarantees that DWU equipment
represents the state-of-the-art for electrolytic
tinning lines, including cleaning and pickling
equipment, tension leveler, tin free steel (TFS)
and tin plating equipment, and finishing
equipment. An innovative electrolyte
process has been developed to meet the
highest demands for top quality products
and for healthier and safer operations thus
supporting the industry’s effort to produce
quality steel at competitive costs.
Outlook
DWU today is the most innovative supplier
for flat product equipment in the global steel
industry by converting all their innovations
into action. This innovaction (innovation +
action) has been further strengthened due
to smooth implementation of all projects
with the in-house automation and process
control systems. Danieli also has state-of-
the-art manufacturing workshops in Italy,
Austria, Thailand and China. This in-house
manufacturing facilities and automation
competence make Danieli capable of
managing the full supply including
Finished coil from an Electrolytic Tinning Line
mechanical, fluids, process and electrics and
automation. This is the best solution to cover
the responsibility of the process and to have
quick learning curve for the benefit of the
end users.
With trendsetting technologies in rolling
and processing developed over decades of
experience as a partner of the steel industry,
DWU is in a unique position to provide
the right selection of rolling and processing
plants to cater to the stringent requirements
of new steel grades with outstanding product
quality required in the presently growing
market. 
Sanat Bhaumik is senior vice-president (flat
products), Danieli India
Note: The views expressed here are those of the
author and not of Steel Insights. The publication
does not take any responsibility for the article in
part or in full.
Technology
BSP gets new Skin
Pass Mill
Steel Insights Bureau
C
hairman and managing director of
Steel Authority of India Limited
(SAIL), C.S. Verma, inaugurated
the state-of-the-art and most advanced Skin
Pass Mill (SPM) in India supplied by Danieli
for the 1.2 million tons per annum (mtpa)
new Cold Rolling Mill complex (CRM III)
at the Bokaro Steel Plant (BSP) on January
18.
The following are the brief technical
specifications of this 0.9-mtpa SPM:
♦♦ Capacity : 860,000 tons per annum
♦♦ Strip thickness : 0.25 to 2.0mm
♦♦ Strip Width : 800 to 1600mm
♦♦ Coil weight : 31 tons (maximum)
♦♦ Mill speed : 1300mpm (max) on no load,
1200mpm (max) operating
♦♦ Skin pass mode : Both wet and dry skin
passing
♦♦ Steel grades: CQ, DQ, DDQ, EDDQ,
HSLA, IF, BH, etc.
♦♦ Yield strength: 140 to 400M/mm2
As a part of the major expansion plan of
SAIL, it was decided to install a state-of-the-
art new CRM complex in Bokaro Steel Plant
to cater to the wide spectrum and high ends
of cold rolled steel products in the market
particularly targeting the automotive, white
goods and appliance sectors.
This new CRM complex has been
installed in the premises of Bokaro Steel
Plant to produce 1.2 mtpa of cold rolled and
galvanised/galvannealed coils using 1.3 mtpa
hot rolled coils from the existing HSM. The
incoming hot rolled coils will be processed in
the PLTCM and BAF before the cold rolled
annealed coils are skin passed in this SPM.
This SPM will be able to process very
soft materials like IF grades and very high
strength steels with necessary elongation,
hardness, flatness and strip roughness
required by mainly the automotive industry.
Designed as a raised mill with strip flow
from left to right, it will mainly consist of the
following equipment:
♦♦ Entry section including walking beam
conveyors, down enders, coil cars, coil
C S Verma, Chairman, SAIL inaugurating BSP’s SPM
preparation station, payoff reel with pup
coil removal system, entry bridle unit, etc.
♦♦ Mill stand equipment consisting of mill
stand with rolls, chocks & bearings,
bending blocks, quick work roll change
device, hydraulic wedge for pass line
adjustment, backup roll change system,
wet skin passing headers and nozzles, anti
crimp roll, cobble guards, roll polishing
device, etc.
♦♦ Delivery section consisting of strip blow-
off unit, thickness gauge, shape meter
roll, hydraulic shear, electrostatic oiler
unit, tension reel, belt wrapper, exit coil
car and exit walking beam conveyor
system.
Danieli’s scope of supply for this SPM
also included all auxiliary systems (hydraulic,
pneumatic, lubrication, fume & dust extract
systems, etc,) and complete electrics and
automation systems which were implemented
by Danieli Automation. This state-of-the-
art Skin pass Mill is the first unit to be
inaugurated in Bokaro CRM Complex III. 
Steel Insights, February 2013 55
 Social Buzz
Industry pins hopes on steel
demand growth
Steel Insights has started a group on LinkedIn called India
Steel Market Watch (ISMW). The readers are welcome to join
the group and participate in daily conversations and surveys
conducted by ISMW on the online forum. Steel Insights may,
at its discretion, publish the results of such surveys and
discussions for the benefit of a larger audience.
Steel Insights Bureau
W
hat ails the domestic steel sector
most? Well, there are a little too
many to keep count of. Delay
in project approvals, land acquisition, raw
material availability, duty free import of
specialised steel – just to name a few of
the road-blocks. Yet, there is hardly any
slowdown in capacity expansion by the
domestic steelmakers. Almost all the major
manufacturers including SAIL, Tata Steel,
JSW and RINL are indulging in ambitious
expansion projects many of which will come
on stream during the Twelfth Five Year
Plan (2012-17). Ask the industry people
about the basic logic behind this apparent
contradiction, and you get a unanimous view
– demand growth.
In the past, the demand factor was more
an assumption than an approximation. But
now with the government and the economy
graduating to regular record-keeping, such
estimates and approximations are becoming
available to the public. In a recent discussion
at the ISMW platform on LinkedIn, the
industry insiders threw light on the quantum
of steel consumption/demand growth in the
domestic market.
According to Susmita Dasgupta, chief
economist,
Joint Plant
Committee
(JPC), the
country’s per
capita steel
consumption
56 Steel Insights, February 2013
has increased by around 2 kgs over the
last financial year. “That quite a bit,” she
commented to a question by Rajiv Bhutara,
director at Maharishi Alloys P Ltd.
The discussion followed the recent
announcement by India’s steel minister Beni
Prasad Verma who informed Parliament that
the present per capita consumption of steel in
the country is 59 kg.
The minister further said that the rural
market has been identified by the government
as one of the areas where the potential of steel
consumption can be enhanced further and
ministry of steel has launched a campaign for
popularising usage of steel in rural areas.
He added that the Institute of Steel
Development and Growth (INSDAG)
has been frequently conducting training
programmes to create awareness about the
use of steel. The main producers have already
established a wide network of rural dealers/
distributors so as to make steel available in
the remote corners of the country. INSDAG
is also working on revised designs of pre
fabricated/semi fabricated applications as
well as increasing aesthetics of steel used in
various projects.
He said that necessary action has since
been initiated to increase and popularise
consumption of steel in the country.
The industry insiders hope that the
high growth in demand, if sustained, would
drive out the various impediments and red
tape. This will be the driving force behind
overall growth in the industry and will help
ease bottlenecks that are putting all kinds of
restrictions currently.
Tap rural market
While talking
about per capita
consumption,
ISMW members
noted the recent
comments by SAIL
chairman C.S.
Verma who stressed on tapping the potential
in rural India. With per capita consumption
of steel at a level of only 15 kg in rural India,
a vast potential exists for steel marketers to
enhance sales in the segment, Verma said
while reviewing the performance of the
eastern region sales force of the company’s
Central Marketing Organisation (CMO).
Verma pointed out that with rural
incomes rising in recent years and aspirations
of the rural populace changing in tandem,
strengthening of retail marketing has become
imperative to retain the company’s market
leadership.
At present SAIL has a countrywide
retail network comprising around 2,400
dealers at the district level and around 500
dealers at the taluka/block level. The SAIL
chairman urged his marketing executives
to attain higher peaks of achievement by
strengthening customer-centric efforts
including customization of products.
Drawing attention to the array of
new products that would come into the
market upon completion of SAIL’s massive
modernisation and expansion programme,
currently under implementation, he stressed
upon further consolidating the company’s
market leadership through provision of more
value-added products and services.
Tata Steel expansion
Meanwhile,
Tata Steel is
expecting to
start full capacity
production at
Jamshedpur plant this quarter after its
modernisation, according to reports.
H.M. Nerurkar, MD of Tata Steel, said
that modernisation of the Jamshedpur plant
is over and commissioning of 9.7 million tons
is almost complete.
Referring to Tata Steel’s Kalinganagar
project in Odisha, Nerurkar said the
project is going great and is expected to be
commissioned in the first phase in 2014. 
 logistics

Iron ore handling by major

ports down 54.5% y-o-y
in April-Dec
Steel Insights Bureau

M
ovement of iron ore through the
12 major Indian ports dropped
sharply by 54.56 percent in
the April-December 2012 period due to
restrictions imposed on mining and a hike
in export duty on iron ore. The major ports
together handled 21.72 million tons (mt)
during the period against 47.81 mt in the
same period last year.
According to data released by the Indian
Ports Association (IPA), Vishakhapatnam however, was about 16.04 percent lower than December period compared to 89.89 mt of
port handled the highest volume of 8.79 mt the iron ore traffic moved through the port in tonnage and 5.84 million TEUs in the same
of iron ore in April-December. This volume, the same period last year. period last year.
The ports Among the major ports, Paradip port
together handled had the distinction of handling the highest
Traffic handled at major ports
(During Apr-Dec, 2012* vis-a-vis Apr-Dec, 2011) 405.27 mt of traffic volume of thermal coal of around 15.16 mt
(*) Tentative (in '000 tons) during the period, in April-December period. Visakhapatnam
about 3.09 percent port handled the highest quantity of 5.15 mt
April to December traffic % variation against
Ports lower than 418.20 mt of coking coal during the period.
2012* 2011 prev. year traffic
recorded during the Movement of coking coal through
Kolkata same period last year. Paradip, Kolkata, Visakhapatnam and
Kolkata dock system 8666 9392 -7.73 They also
Chennai ports declined during the period
handled a total of
Haldia dock complex 20198 24427 -17.31 when compared to the corresponding period
20.91 mt of coking
Total: Kolkata 28864 33819 -14.65 last year.
coal in the period,
Five major ports showed negative
Paradip 40749 40500 0.61 down 3.68 percent
growth in traffic handling during the April-
Visakhapatnam 44201 52646 -16.04 from 21.71 mt
December period of the current fiscal, while
handled in the same
Ennore 12212 10392 17.51
period last year. the remaining seven showed positive growth
Chennai 39896 41940 -4.87 Movement of on a year-on-year basis.
V.O. Chidambaranar 20951 20853 0.47 container traffic in In terms of growth, Ennore port topped
terms of tonnage the list with a 17.51 percent increase in cargo
Cochin 14893 14872 0.14
fell in the April- throughput. Cochin port’s growth was lowest
New Mangalore 27025 24233 11.52 at about 0.14 percent during the period. In
December period,
Mormugao 14918 28337 -47.36 while that of TEUs terms of traffic volume, Kandla port clinched
Mumbai 44090 40217 9.63 also dropped during the top rank with a cargo volume of 69.49 mt
the period. The recorded for the period.
JNPT 47977 49489 -3.06
major ports handled The Mormugao port registered the
Kandla 69497 60910 14.10 highest decline of 47.36 percent in traffic
89.23 mt of tonnage
Total 405273 418208 -3.09 and 5.76 million handling during the period due to a fall in
Source: IPA TEUs in April- iron ore export. 

Steel Insights, February 2013 57

Logistics

Railways iron ore handling

up 13% m-o-m in Dec
Steel Insights Bureau

T
he Indian Railways transported
9.46 million tons (mt) of iron ore in
December, moving up 13 percent over
8.37 mt transported a month ago, according
to information available with Steel Insights.
Thus, revenue from transportation of
iron ore for exports, steel plants and for other

Commodity-wise revenue domestic users in December rose to `581.75

Quantity (in mt) Earning (in ` cr) crore, up 18.72 percent from `490 crore in
Commodity November.
Dec’11 Dec’12 Dec’11 Dec’12
During the month, the Railways
Coal transported 44.5 mt of coal, up 8.83 percent
(i) for steel plants 3.98 3.73 169.15 214.51 from 40.89 mt in November and revenue
(ii) for washeries 0.12 0.11 1.12 2.21 earnings from transportation of coal also
increased to `3,347.27 crore in December
(iii) for thermal power houses 27.15 28.32 1,766.91 2,317.78
from `3,085.81 crore in November.
(iv) for public use 9.76 12.34 611.38 812.77 Overall, the Indian Railways’ revenue
(v) Total 41.01 44.5 2,548.56 3,347.27 earnings from commodity-wise freight traffic
Raw material for steel plants rose month-on-month in December, mainly
1.12 1.24 99.41 130.07
except iron ore due to higher transportation of coal and iron
Pig iron and finished steel ore. Revenue earnings from commodity-wise
freight traffic during December 2012 stood
(i) from steel plants 2.39 2.35 306.4 370.98
at `7491.74 crore, up 8.82 percent compared
(ii) from other points 0.71 0.66 62.92 69.42 with `6,884.56 crore earned in November.
(iii) Total 3.1 3.01 369.32 440.4 Revenue from transportation of cement
Iron ore in December stood at `674.78 crore (8.72
mt) as compared to `629.5 crore (7.96 mt)
(i) for export 0.38 0.11 107.13 28.24
in November, while that from foodgrains
(ii) for steel plants 5.18 5.19 206.31 233.75 transportation increased to `596.54 crore
(iii) for other domestic users 3.38 4.16 230.2 319.76 (4.24 mt) in December from `523.61 crore
(iv) Total 8.94 9.46 543.64 581.75 (3.82 mt) in November.
The Railways revenue from transportation
Cement 9.37 8.72 562.73 674.78
of fertilizers in December rose to `480.23
Foodgrains 3.94 4.24 403.7 596.54 crore (4.38 mt) from `476.18 crore (4.38 mt)
Fertilizers 5.61 4.38 481.76 480.23 in November.
Mineral Oil (POL) 3.52 3.45 326.89 403.16 Revenue from transportation of
Container Service
petroleum oil and lubricant (POL) in
December stood at `403.16 crore (3.45 mt),
(i) Domestic containers 0.79 0.79 78.68 85.79
while the same from pig iron and finished
(ii) EXIM containers 2.67 2.64 224.96 249.88 steel from steel plants and other points
(iii) Total 3.46 3.43 303.64 335.67 was `440.4 crore (3.01 mt). Revenue from
Balance other goods 6.74 5.79 462.79 501.87 container services was `335.67 crore (3.43
mt) and from transportation of other goods
Total revenue earning traffic 86.81 88.22 6102.44 7491.74
was `501.87 crore (5.79mt). 

58 Steel Insights, February 2013

 macro outlook

Macroeconomic
INR movement against select major currencies
72 88
70
68
66 83

indicators of India

INR vs USD & EURO

64

INR vs GBP & YEN

62
60 78
58
56 73
54
52
50 68
Steel Insights Bureau 48
46 63
44
42
40 58

Foreign Exchange Assets

298000 1700000
USD EURO GBP YEN
296000
1650000
294000 Source: rbi
292000 1600000 The INR rose against the USD in January due to inflow of foreign funds into domestic

in Rs crore
290000 share and debt markets. US non-farm payroll data may decide on INR’s future progress.
in million $

1550000
288000 However, the upcoming stake-sale by the government in state-owned power producer
286000 1500000 NTPC Ltd is likely to boost FII investment and improve INR versus the USD. If the inflows
284000 of USD for the stake sale are large enough, the INR may breach the 53 mark.
1450000
282000
280000 1400000 Inflation rate in India
1-Jun-12
15-Jun-12
29-Jun-12
6-Apr-12
20-Apr-12

2-Nov-12
16-Nov-12
30-Nov-12
27-Jan-12
10-Feb-12
24-Feb-12
9-Mar-12
23-Mar-12

4-May-12
18-May-12

10-Aug-12
24-Aug-12
7-Sep-12
21-Sep-12

14-Dec-12
28-Dec-12
11-Jan-13
25-Jan-13
13-Jul-12
27-Jul-12

5-Oct-12
19-Oct-12

11.00%

10.00%
in Million $ in Rupees crore

8.07%
8.01%
9.00%

7.69%
7.56%

7.58%
Source: rbi

7.23%
8.00%
India’s foreign exchange (forex) reserves increased by $77.6 million to $295.74 billion for
7.00%

7.50%

7.52%
7.55%
the week ended January 27. Forex reserves had decreased by $580.3 million to $295.67

7.32%

7.24%
billion for the week ended January 18. Foreign currency assets (FCA) went up by $79.3 6.00%
million at $261.70 billion during the week ended January 27. While it got lowered lower by 5.00%
$646.8 million at $261.62 billion in the previous week. Gold reserves value remained the
same at $27.21 billion for the two weeks under consideration. The special drawing rights
(SDRs) dropped by $0.5 million to $4.43 billion during the week ended January 27, while it
had increased by $2.3 million to $4.43 billion during the previous week. Reserves with IMF
Source : OEA, GoI, Ministry of Commerce & Industry
went down by $0.2 million to $2.38 billion for the week ended January 27.
India’s WPI based headline inflation rose to 7.18 percent in December. This propelled RBI
to cut interest rates to boost economic growth rates. October inflation rates got revised
Wholesale price index (Selected categories) to 7.32 percent from 7.45 percent. The slowdown in inflation for December was led by a
230
220
moderation in the prices of fuel and manufactured goods. Experts opine that manufactured
210 goods will trend lower in the coming months which will bring down inflation rates.
200
190
Index of Industrial Production
180
170
205
160
150 185
140
130 165
120
110 145

All Commodities Primary Articles 125

Manufactured Products Fuel & Power
Basic Metals Alloys & Metal Products Steel 105
Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12
Source : OEA, GoI, Ministry of Commerce & Industry
Mining & Quarrying Manufacturing
India’s wholesale price index (WPI) (Base 2004-05=100) stood at 168.6 in December Electricity General Index
almost similar to 168.8 recorded in the previous month. Also WPI for October this year
was revised to 168.5 this month. The index for primary articles group increased by 10.61 Source : Govt. of India, MoSPI
percent to 220 from 198.9 in December the previous year. The index for manufactured The industrial output dipped from a robust 8.3 percent in October to a four-month low of
products group also rose by 5.04 percent to 148 from 140.9 in December 2011. Fuel and 0.1 percent in November due to poor performance of manufacturing and mining sectors
power index rose 9.38 percent to 188.9 from last year while index for basic metals and and decline in production of capital goods. IIP grew by 6 percent in November, 2011 while
metal alloys rose by 3.37 percent to 165.7 for the month. Steel index however remained growth was 1 percent in April-November period this fiscal, down from 3.8 percent in the
unchanged. same period in 2011-12.

Steel Insights, February 2013 59

 market report

Top 10 steel-producing countries

Global crude steel production Rank Country

2012
(Mt)
2011
(Mt)
2012/
2011 (%)

rise y-o-y in 2012

1 China 716.5 694.8 3.1
2 Japan 107.2 107.6 -0.3
United
3 88.6 86.4 2.5
States
4 India 76.7 73.6 4.3
Chandrika Mitra China, the single largest producer,
produced 708.784 mt of crude steel in this 5 Russia 70.6 68.9 2.5

W
orld crude steel production for year, an increase of 4 percent as compared to South
6 69.3 68.5 1.2
2011, when production stood at 684.275 mt. Korea
the 62 countries reporting to
the World Steel Association China’s share of world crude steel production 7 Germany 42.7 44.3 -3.7
(Worldsteel) rose by 1.2 percent to 1510.133 increased from 45.4 percent in 2011 to 46.3
8 Turkey 35.9 34.1 5.2
million tons (mt) in 2012 as compared to percent in 2012.
Elsewhere in Asia, Japan produced 9 Brazil 34.7 35.2 -1.5
that reported in 2011 at 1491.086 mt. Again,
crude steel production for December 2012 107.235 mt of crude steel in 2012, a slight 10 Ukraine 32.9 35.3 -6.9
was higher by 3.62 percent compared to decrease of 0.33 percent compared to 107.595
December 2011. mt last year. India’s production for 2012 produced 27.2 mt in 2012, a 5.2 percent
In 2012, Asia produced 982.711 mt of stood at 76.715 mt, up 6 percent compared
decrease over 2011. France’s crude steel
crude steel, an increase of 3 percent over 2011 to 72.206 mt 2011. South Korea produced
production in 2012 was 15.6 mt, a decrease
when production stood at around 955.208 69.321 mt during 2012, a 1 percent increase
of 1.1 percent. Spain produced 13.6 mt of
mt. The EU produced 169.428 mt of crude on the same period in 2011.
crude steel in 2012, a 12.1 percent decrease
steel in 2012, down by 5 percent compared In the EU, the EU recorded a decrease
on 2011.
to 177.468 mt produced in 2011. North of 4.7 percent compared to 2011, producing
In 2012, The CIS showed a decrease of
America’s crude steel production in 2012 was 169.4 mt of crude steel in 2012. Germany
121.863 mt, 2 percent higher than 118.961 1.2 percent in 2012, producing 111.3 mt of
produced 42.7 mt of crude steel in 2012,
mt of 2011. crude steel. In 2012, crude steel production
a decrease of 3.7 percent on 2011. Italy
in North America was 121.9 mt, an increase
World crude steel production of 2.5 percent on 2011. Annual crude steel
in ‘000 tons production for South America was 46.9 mt
Dec 12 / in 2012, a decrease of 3.0 percent on 2011.
World Crude Steel
Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Dec 11 (% Russia produced 68.9 mt of crude steel, a
Production
change)
2.5% increase on 2011 and Ukraine recorded
European Union (27) 14,228 12,028 14,301 14,161 13,595 11,975 -4.51% a decrease of -6.9% with a year-end figure of
Other Europe 3,264 3,175 3,186 3,020 3,142 2,991 -10.59% 32.9 mt.
C.I.S. (6) 9,172 9,250 9,280 8,933 8,904 8,925 -4.22% Turkey’s crude steel production for
North America 10,014 10,348 9,592 9,582 9,511 10,087 -0.46% 2012 was 35.9 mt, an increase of 5.2 percent
South America 3,937 3,836 3,835 4,185 3,873 3,603 -5.06% compared to 2011. The US produced 88.6
mt of crude steel, 2.5 percent higher than
Africa 1,166 1,213 1,153 1,196 1,151 1,217 1.25%
2011. Brazil produced 34.7 mt in 2012, down
Middle East 1,404 1,589 1,642 1,634 1,659 1,640 -4.58%
by 1.5 percent compared to 2011.
Africa/Middle East 2,570 2,803 2,795 2,830 2,810 2,857 -2.18% The crude steel capacity utilisation
China 61,693 58,703 57,946 59,096 57,471 57,656 10.53% ratio of the 62 countries in December 2012
India 6,359 6,476 6,299 6,604 6,400 6,600 7.32% declined to 73.2 percent compared to 76.1
Japan 9,251 9,207 8,802 8,836 8,505 8,569 2.04% percent in November 2012.The average
South Korea 5,907 5,632 5,661 5,651 5,640 5,811 -2.33% capacity utilisation ratio in 2012 was 78.8
percent compared to 80.7 percent in 2011.
Taiwan, China 1,761 1,730 1,440 1,675 1,664 1,770 -7.81%
It is to be noted that the January to
Asia 84,971 81,747 80,147 81,862 79,681 80,406 7.81%
December 2012 data covers 62 countries
Oceania 494 519 511 504 473 450 6.17% against 64 in January to December 2011.
Rest of the world The 62 countries included 2012 accounted
66,957 65,004 65,702 65,979 64,519 63,637 -1.94%
except China
for approximately 98 percent of total world
World 128,650 123,707 123,648 125,075 121,990 121,293 3.62% crude steel production in 2011. 

60 Steel Insights, February 2013

Market Report

Long steel market

Domestic flat & long markets The dwindling demand and falling prices

Markets remain slow on

which started since mid of January was still
visible. The market lacked both strength and
interest to make a comeback and ended up
in remaining by and large slow and sluggish

sluggish demand on all counts. Poor demand from the

Tamajit Pain & Sanjoy Chakraborty
construction sector, liquidity crisis among the
buyers, unwillingness on part of the buyers to
go for bulk purchase, economic worries, etc.
kept the market down.
as the buyers are shying away from lifting
The ingot price plummeted expectedly
material. Nevertheless, the imports have
with the expectation of credit easing fading

F
lat steel markets across the country been slow due to appreciation in rupee. The
away. With barely two months to go for the
continued to be sluggish as demand average transaction prices for IS 2062 grade
culmination of FY’12-13, the revival seems
remained weak. As market sentiments A/B structural HRC, 3mm thick and above
to be lost cause even if there is some cutback
continued to be weak, SAIL increased its base averages at `33,500-34,000 per ton.
in February with barely month to go after
prices in an attempt to lift the sentiments. Indian exporters are looking to raise
that.
Nevertheless, given the current situation offers for HR coil
of the demand which continues to be fragile, for March delivery Domestic HR coil prices (HRC - 2.5mm – cold rolling)
the raised prices may not generate much given the rising Date Kolkata Kanpur Delhi
interest. Meanwhile, the appreciation in the export offers from
04-Jan-13 36490 37050 35910
rupee has checked the imports which might China, Japan and
South Korea amid 10-Jan-13 36200 37480 36440
support the prices. Thus it is the matter of
time that would state whether the rise would higher raw material 17-Jan-13 35940 37480 36440

sustain or not. prices. Chances are 25-Jan-13 35680 37050 36440

The domestic market failed to see any fair that Indian 01-Feb-13 35510 36790 36440
optimism in the market as the demand once exporters may fetch
The above prices are in `/MT (basic) Source: Steel Insights Research
again failed to see any recovery. Amidst this $600-610 per ton,
situation in an attempt to lift the market FOB Indian west coast for 2 mm HR coil
The much talked about monetary policy
sentiments SAIL raised its flat steel prices by from European buyers. Considering delivery
review by RBI turned out to be a whimper
up to `800 per ton. Current offer (excluding time and freight charges, Indian exporters with mere 25 basis point reductions in repo
VAT) from Rourkela Steel Plant (RSP) is might consider increment in export prices. rate. Optimism was doused as expectations
at around `40,200 per ton and Bokaro Steel The imports into the country have went rife. Even though it was the first repo
Ltd (BSL) at `41,100 per ton. Plate prices slowed down ahead of the Chinese New rate cut in 9 months market expected 50 basis
have also gone up by `800 per ton to `38,000 Year. China is expected to maintain status point roll back to gain foothold. Repo rate
per ton (excluding VAT) from Bhilai Steel quo on its prices for this month leaving little now stands at 7.75 percent. The steel market
Plant. room for threat of imports. Imports offers is yet to show a positive reaction to such a
However, the question remains as how into India were also sparse for Japanese and policy decision.
much of this would be accepted by the buyers Korean origin material and the mills there The demand from the downstream
as the market remained mostly pessimistic have secured enough order for February industry was weak which weighed on the
about higher prices being achieved given the production. Thus they will not be aggressive semi-finished steel demand.
sluggish demand. The market has been slow on the exports prices for the time. The semi-finished market remained
shaky over the week as the demand
TMT prices at Raipur conditions remained frail. The prices of
Dates 23-Dec-12 31-Dec-12 7-Jan-13 28-Jan-13 2-Feb-13 semi-finished steel like billet, bloom, skelp,
etc have declined at most locations of the
AC-TMT 32800 34210 34800 33110 33010
country with buyers shying away from the
AC-TURBO 32900 -- 34900 33410 33010 market. Durgapur & Raipur saw a price drop
NIRMAN 32600 34300 -- -- -- of around `1,000 per ton.
The finished steel market continued to
PRIME GOLD -- 34600 35600 -- -- remain weak and the buyers are not interested
SUPER 32800 34100 34200 33000 32800 in purchasing in bulk at the moment. The
crisis in the construction and infrastructure
ATLAS 32700 34500 34800 -- --
sector continues to plague the finished steel
The above prices are in `/ton (basic) Source: Steel Insights Research segment. 

Steel Insights, February 2013 61

Market Report

Sponge iron in Indian markets

Domestic raw materials (in `/ton basic)

Prices show mixed trend

Date Raipur Raigarh Rourkela

31-Jan 20100 19300 18400

24-Jan 20200 19300 18700

in December 15-Jan

7-Jan
20800

21400
20100

20600
19100

19300
Source: Steel Insights Research

from European exporters, whereas US

exporters were heard to have kept offers at
around $425 per ton cfr, Mumbai. Although
buying interest was limited on factors like
falling sponge iron (DRI) prices in domestic
market and weak Rupee against US dollar.

Sponge iron
Sponge iron (DRI) prices in some Indian
markets eased in January on low buying
support, market sources told Steel Insights.
In fact, most plants are still operating below
capacity, industry sources informed, and
manufacturers believe prices are at bottom in
view of the disturbed supply of iron ore in
the country.

Steel Insights Bureau
any hint of real demand in the market. The
prices have more or less at its previous levels.
Pig iron
NINL slashed its steel grade pig iron prices
further by `500 per ton on January 7, 2013
and reviewed their prices again on January 17.
However, on account of the sluggish demand
scenario, NINL on January 17 decided to
keep the prices fixed at `22,000 per ton

T
he scrap steel market remained Imported scrap offers to the Indian (basic). NINL is also offering discounts
sluggish in January on demand market more or less remained stable with
as high as `400 per ton for bulk purchase
worries still haunting the market. offers for shredded scrap (containerised)
over 7,000 tons, bringing down the price to
The sentiment remained fatigued with hardly varied from $420-425 per ton cfr, Mumbai,
`21,600 per ton (basic). As per the market
sources, booking does not seem impressive.
Melting scrap price trend (` per ton) RINL too finding it difficult to dispose
Date
Mandi
Durgapur Raipur Kandla Chennai Jamshedpur their materials as the overall demand
Gobindgarh continues to remain slackened. In the second
Dec’12 Week 1 24562 24290 23700 22700 23000 24560 week of 2013, RINL managed to conclude a
Dec’12 Week 2 24234 24050 23400 22400 22600 24560 deal of 100,000 tons of Pig iron at `21,400
Dec’12 Week 3 24424 24058 23100 22460 22800 24560 per ton (ex works Vizag). Now the injection
Dec’12 Week 4 24847 24050 23100 22633 23000 24560 of this 100,000 tons in the market has resulted
in oversupply and hence a further correction
Jan’13 Week 1 25228 23996 24300 22500 23200 24560
may be witnessed in the coming days.
Jan’13 Week 2 25180 24390 24300 22560 23500 24560
NINL and RINL are again expected
Jan’13 Week 3 24930 24305 24200 22900 23500 24560 to review their prices in the first week of
Jan’13 Week 4 24975 23862 24150 22933 23433 24560 February. The direction of their price revision
The above prices in `/ton (basic) Source: Steel Insights Research remains unclear at the moment. 

62 Steel Insights, February 2013

 PRICE DATA

Indicative market price for December 2012

Steel Insights Bureau
(` per ton)

Sl. No. ITEM Kolkata Delhi Mumbai Chennai

1 PIG IRON 29130 34500 32100 35700
2 BILLETS 100 MM 40500 40860 42680 41630
3 BLOOMS 150X150 MM 39340 39800 41410 40040
4 PENCIL INGOTS 32900 30000 35100 35700
5 WIRE RODS 6 MM 46630 47760 49390 48360
6 WIRE RODS 8 MM 46220 47130 48660 47900
7 ROUNDS 12 MM 46050 46390 46660 47260
8 ROUNDS 16 MM 45870 46810 46690 47170
9 ROUNDS 25 MM 45400 46710 46460 47000
10 TOR STEEL 10 MM 48020 48710 48750 49180
11 TOR STEEL 12 MM 46890 47250 47870 48620
12 TOR STEEL 25 MM 46710 47600 47910 48530
13 ANGLES 50X50X6 MM 46360 45410 47810 47950
14 ANGLES 75X75X6 MM 45110 44820 47110 47230
15 JOISTS 125X70 MM 46180 46630 47810 48000
16 JOISTS 200X100 MM 45700 46810 48140 48000
17 CHANNELS 75X40 MM 46620 48300 48870 48570
18 CHANNELS 150X75 MM 46110 47590 48220 47850
19 PLATES 6 MM 47530 49420 49480 50030
20 PLATES 10 MM 47540 49420 49480 50030
21 PLATES 12 MM 48100 49950 49890 50600
22 PLATES 25 MM 48750 50470 50410 51200
23 H. R. COILS 2.00 MM 46760 48650 49660 49190
24 H. R. COILS 2.50 MM 45510 47590 48540 48130
25 H. R. COILS 3.15 MM 45420 47590 48540 48130
26 C. R. COILS 0.63 MM 51480 52580 53000 53840
27 C. R. COILS 1.00 MM 50330 51680 52200 52920
28 G. P. SHEETS 0.40 MM 55080 57030 56890 59890
29 G. P. SHEETS 0.63 MM 53320 51880 54510 58880
30 G. C. SHEETS 0.40 MM 53380 56000 54950 59710
31 G. C. SHEETS 0.63 MM 53410 52760 54690 59600
32 MELTING SCRAP H M S - I 25000 27000 NA 24680
33 MELTING SCRAP H M S - II 24500 27000 NA 23630
34 SPONGE IRON (COAL BASED) 20250 24500 28900 19950

NOTE: (1) All prices are in Rs./Tonne and has been compiled on the basis of average of Main & Others producers’ price. (2) Prices are inclusive of Excise
Duty & Sales / Vat Tax (3) All prices are as on 15 day of every month (4) Prices are indicative

64 Steel Insights, February 2013

 PRODUCTION DATA

Production, imports, exports, availability & apparent

consumption (provisional) April - December 2012
Steel Insights Bureau

(in ‘000 tons)

FINISHED STEEL

Non-Alloy Steel (Carbon) Alloy Steel Total

PRODUCERS

2012-13 2011-12 2012-13 2011-12 2012-13 2011-12

% Variation % Variation % Variation
(Prov.) (Prov.) (Prov.) (Prov.) (Prov.) (Prov.)

SAIL 7241 6732 7.6 202 199 1.5 7443 6931 7.4

RINL 1974 2080 -5.1 1974 2080 -5.1

TSL 4544 4073 11.6 4544 4073 11.6

(a) Prod. of Main Producers 13759 12885 6.8 202 199 1.5 13961 13084 6.7

ESSAR 4509 4586 -1.7 4509 4586 -1.7

JSW ISPAT 2572 2308 11.4 2572 2308 11.4

JSWL 7795 6324 23.3 936 687 36.2 8731 7011 24.5

JSPL 841 920 -8.6 841 920 -8.6

(b) Prod. of Major Producers $ 15717 14138 11.2 936 687 36.2 16653 14825 12.3

Others 30366 30943 -1.9 2791 2663 4.8 33157 33606 -1.3

Less : IPT/Own Consumption 6695 6530 355 243 7050 6773

c) Total Production for Sale 53147 51436 3.3 3574 3306 8.1 56721 54742 3.6

d) Imports $ 4403 3853 14.3 1387 1131 22.6 5790 4984 16.2

e) Exports $ 3309 2750 20.3 469 298 57.4 3778 3048 24.0

e) Availability (c+d-e) 54241 52539 3.2 4492 4139 8.5 58733 56678 3.6

f) Variation in Stock -608 -155 4 -1 -604 -156

g) Apparent Consumption (e-f) 54849 52694 4.1 4488 4140 8.4 59337 56834 4.4

Less : Double Counting 4822 4301 985 894 5807 5195

Real Consumption 50027 48393 3.4 3503 3246 7.9 53530 51639 3.7

Source: Steel Ministry

66 Steel Insights, February 2013

 price trend

Ferro alloys & metals price trends

Steel Insights Bureau

Ferro alloys & Metals January'13 December'12 November'12

Ex-works Rs/ ton

Ferro Silicon (Si - 70%)
71750 74000 72000

Ex-works Rs/ ton

HC Ferro Chrome (Cr - 60%)
70500 70500 67750

Ex-works Rs/ ton

HC Ferro Manganese (Mn - 70%)
53750 53250 53250

Ex-works Rs/ ton

Silico Manganese (Mn - 60%, Si - 14%)
54500 53500 53500

Ex-works Rs/ ton

MC Ferro Manganese ( Mn - 70%, C -1.5)
76500 76500 76500

Ex-works Rs/ kg
Ferro Vanadium
960 785 735

Ex-works Rs/ kg
Ferro Moly (Mo - 60% min)
1015 1020 985

Ex-works Rs/ ton

Ferro Titanium (Ti - 30%)
155500 155500 162000

Steel Insights, February 2013 67

 Iron Ore data

Iron ore export data for December 2012

Steel Insights Bureau

Port Destination Country Date Product Category Fe Content Unit Price (in Rs/ton) Quantity (in tons.)

63.5 6,110 10,000

3-Dec-13 FINES
63.5/63 6,110 10,000

7-Dec-13 FINES 63.5 6,110 3,000

22-Dec-13 FINES 55.5 3,596 2,000

26-Dec-13 FINES 62.9 5,484 14,800

KOLKATA CHINA 27-Dec-13 FINES 54 3,584 5,000

55 1,350 16,000
28-Dec-13 FINES
63.5/63 6,082 22,000

54 4,249 7,000

29-Dec-13 FINES 57/56 4,833 17,000

63.5/63 6,625 15,000

KOLKATA Total 121,800

1-Dec-13 FINES 2,946 6,000

13-Dec-13 FINES 3,596 55,900

PARADIP CHINA 4,013 1,620

14-Dec-13 FINES
4,013 1,315

31-Dec-13 FINES 3,665 50,000

PARADIP Total 114,835

56 4,200 11,875
5-Dec-12 FINES
57 4,364 9,900

3,663 10,000
7-Dec-12 FINES 55.5
3,731 1,000

12-Dec-12 FINES 52 3,437 27,000

13-Dec-12 FINES 52 3,402 1,575

CHINA
17-Dec-12 FINES 63.5 5,967 29,440
VIZAG
55.5 3,618 7,820
21-Dec-12 FINES
55.55 3,618 47,380

22-Dec-12 FINES 54 2,808 18,400

28-Dec-12 FINES 56 3,910 4,226

29-Dec-12 FINES 56 3,910 10,494

3-Dec-12 LUMPS 65 7,083 66,446

JAPAN
31-Dec-12 FINES 65 6,454 75,854

VIZAG Total 321,410

Grand Total 558,046

68 Steel Insights, February 2013

Iron Ore data

Iron ore import data for December 2012

Steel Insights Bureau

Unit Price Unit Price Quantity

Port Date Country of Origin Item Description
(in Rs.) (in $) (in tons)
4-Dec-12 BAHRAIN IRON ORE PELLETS 9,748 175.64 10,000
CHENNAI
7-Dec-12 BAHRAIN IRON ORE PELLETS 9,748 175.64 10,000
CHENNAI Total 20,000
1-Dec-12 BRAZIL IRON ORE PELLETS 8,567 154.37 10,000
AUSTRALIA IRON ORE PELLETS 9,197 165.71 5,000
4-Dec-12
MALI IRON ORE LUMPS 7,209 129.88 1,970
6-Dec-12 AUSTRALIA IRON ORE PELLETS 8,427 151.84 2,000
7-Dec-12 AUSTRALIA IRON ORE PELLETS 9,197 167.22 5,000
AUSTRALIA IRON ORE PELLETS 8,351 151.84 2,000
10-Dec-12
MALI IRON ORE LUMPS 7,209 131.06 1,970
12-Dec-12 UKRAINE IRON ORE PELLETS 7,906 143.74 7,000
13-Dec-12 AUSTRALIA IRON ORE PELLETS 8,351 151.84 2,000
AUSTRALIA IRON ORE PELLETS 9,115 165.72 5,000
BAHRAIN IRON ORE PELLETS 8,964 162.99 2,500
14-Dec-12
KANDLA SENEGAL IRON ORE LUMPS (FE 63.50%) 7,144 129.88 1,970
UKRAINE IRON ORE PELLETS 8,520 154.90 5,000
15-Dec-12 AUSTRALIA IRON ORE PELLETS 8,351 151.84 2,000
BAHRAIN IRON ORE PELLETS 8,884 161.53 5,000
19-Dec-12
BRAZIL IRON ORE PELLETS 8,491 154.37 10,000
20-Dec-12 MALI IRON ORE LUMPS (FE 63.50%) 7,144 129.88 2,616
8,209 148.44 5,000
AUSTRALIA IRON ORE PELLETS
24-Dec-12 8,351 151.02 2,000
BAHRAIN IRON ORE PELLETS 9,028 163.25 2,422
26-Dec-12 BAHRAIN IRON ORE PELLETS 8,932 161.53 5,000
AUSTRALIA IRON ORE PELLETS 9,164 165.72 5,000
27-Dec-12
FINLAND IRON ORE PELLETS (BF ACID 65) 8,067 145.87 3,153
KANDLA Total 93,600
4-Dec-12 AUSTRALIA IRON ORE PELLETS 7,470 134.60 5,000
MUNDRA 14-Dec-12 AUSTRALIA IRON ORE PELLETS 7,403 134.60 5,000
28-Dec-12 SENEGAL IRON ORE LUMPS 6,085 110.04 1,258
MUNDRA Total 11,258
Grand Total 124,858

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Steel Insights, February 2013 69

Tear along the dotted line Tear along the dotted line

70 Steel Insights, February 2013