M0ney – Count the zeroes that matter


STEEL Industry – Synopsis

  • India has turned exporter of steel prominently since 2015, so any impact on global exporters will have an impact on Indian industry.
  • Pellets are used as raw material in steel industry, so there is plenty of need for GAS for burn pellets to convert them into steel.
  • GAS availability sanctions by the government, plays an important role.
  • BRAZIL is the biggest exporter of Pellets.
  • Raw material if Coking COAL… if the price increases, its passed on across levels.
  • China exports 50-60 MT YOY. Their production is majorly driven by their personal consumption levels, due to manufacturing base.
  • Resolving NPA problem in steel sector is very important.
  • Manganese, which is a silver gray metal, is used in the steel industry as an input largely in value-added steel.
  • India imports close to 10 million tonnes of manganese annually as its total annual production of 2 million hardly meets the domestic demand. However, companies like MOIL are now aiming to increase their production capacity from 1.3 million tonnes annually to 2.5 million tonnes by the end of 2020, which is a growth of about 18 percent annually.
  • Steel demand growth to largely depend on increased steel in housing.
  • 19/June/2017
  • Source : CNBC, Aruna Sharma, Steel Secretary on the channel.
  • Import duty on Nickel is Zero,
  • Zero Nickel & Coking Coal still needs to be decided.
  • Import Duty:
  • Customs duty on import of some steel grades has been cut to 5%.
  • We are strong in steel because of plenty of availability of iron ore.
  • Cost of below ram materials cut to 5%
  • Hot Rolled Coils
  • Cold-rolled magnesium oxide (MGO) coated & Annealed steel
  • Hot Rolled annealed & Pickled coils
  • Reason for above – No Logic in having import duty on products not available locally.
  • All steel companies have positive EBIDTA except, Monnet ISPAT.
  • SAIL – Operating profit – 65 cr, Finance Costs – 2527 cr.
  • Capping Iron ore prices  – Centre plans to cap price to make cheaper raw materials available to Steel Industry.
  • Expect 4-5%, enhancement in steel demand in the current fiscal.
  • National Steel Policy 2017,
  • To achieve 300 MT of steel making capacity by 2030.
  • Important to have fresh infusion on money into steel sector.
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