Indian Steel Industry Swot Analysis Engineering Essay

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Rich mineral resources: India has abundance of iron ore, coal and many other raw materials required for iron and steel making. It has the fourth largest iron ore reserves (10.3 billion tonnes) after Russia, Brazil, and Australia. Therefore, many raw materials are available at comparatively lower costs.

Technical manpower: It has the third largest pool of technical manpower, next to United States and the erstwhile USSR, capable of understanding and assimilating new technologies.

Workforce: Considering quality of workforce, Indian steel industry has low unit labour cost, commensurate with skill. This gets reflected in the lower production cost of steel in India compared to many advanced countries.

Untapped market: - With such strength of resources, along with vast domestic untapped market, Indian steel industry has the potential to face challenges successfully.

Other strengths include: -

Strong managerial capability

Strongly globalised industry and emerging global competitiveness

Modern new plants & modernized old plants

Strong DRI production base

Regionally dispersed merchant rolling mills


High ash content of indigenous coking coal: This is inherent in the quality and availability of some of the essential raw materials available in India, and they adversely affect the productive efficiency of iron-making and is generally imported.

Capital intensive industry: Also, Steel is a capital intensive industry; steel companies in India are charged an interest rate of around 14% on capital as compared to 2.4% in Japan and 6.4% in USA.

Low labour productivity: In India the advantages of cheap labour get offset by low labour productivity; e.g., at comparable capacities labour productivity of SAIL and TISCO is 75 t/man year and 100 t/man years, for POSCO, Korea and NIPPON, Japan the values are 1345 t/man year and 980 t/man year.

High administered price and High cost of energy: Prices of essential inputs like electricity are highly administered and it puts Indian steel industry at a disadvantage; about 45% of the input costs can be attributed to the administered costs of coal, fuel and electricity.

Other weaknesses include:-

Higher duties and taxes

Labor laws

Dependence on imports for steel manufacturing equipments & technology

Slow statutory clearances for development of mines


Increasing consumption: The biggest opportunity before Indian steel sector is that there is enormous scope for increasing consumption of steel in almost all sectors in India. The Indian rural sector remains fairly unexposed to their Multi-faceted use of steel.

Substitution and cost effective usage: The usage of steel in cost Effective manner is possible in the area of housing, fencing, structures and other possible applications where steel can substitute other materials which not only could bring about Advantages to users but is also desirable for conservation of forest resources.

Many potential sectors: Excellent potential exist for enhancing steel consumption in other sectors such as automobiles, packaging, engineering industries, irrigation and water supply in India.

Other opportunities include:-

Huge Infrastructure demand

Rapid urbanization

Increasing demand for consumer durable

Increasing interest of foreign steel producers in India


Linkage between steel industry and economic growth: The linkage between the economic growth of a country and the growth of its steel industry is strong. The growth of the domestic steel industry between 1970 and 1990 was similar to the growth of the economy, which as a whole was sluggish. This strong relation in today's environment where the growth of the industry has become stagnant owing to the overall slowdown has resulted in enhanced rivalry among existing firms.

Price wars: As the industry is not growing the only other way to grow is by increasing one's market share. The Indian steel industry has witnessed spurts of price wars and heavy trade discounts, which has impacted the Indian Steel Industry.

Other threats include:-

Slow growth in infrastructure development

Market fluctuations and China's export possibilities

Global economic slow down


Steel is not a single product. There are currently more than 3,500 different grades of steel with many different physical, chemical, and environmental properties. Approximately 75% of modern steels have been developed in the last 20 years. If the Eiffel Tower were to be rebuilt today the engineers would only need one-third of the amount of steel. Modern cars are built with new steels that are stronger, but up to 25% lighter than in the past.

Semi-finished products are solid blocks of steel, usually with a square or rectangular cross section. At a steel mill, the crude steel production process turns molten steel into ingots, blooms, billets or slabs. These are called semi-finished products.

Finished steel products are forged from semi-finished products. They are classified as follows:

Cold-finished bars and flats (bright bars)

Cold-finished sections including forged and cold-formed sections

Cold-rolled narrow strip

Cold-rolled plate and sheet in coil and lengths

Deformed reinforcing bars

Drawn wire

Forged bars

Forgings (unworked)

Heavy sections, piling and welded structural sections

Hot-rolled bars and flats in lengths

Hot-rolled light sections

Hot-rolled narrow strip including universal plates

Hot-rolled rod in a coil (including reinforcement bar in a coil)

Hot-rolled wide strip, plate and sheet

Points, switches, crossings, tyres, wheels and axles

Rails and rolled accessories

Silicon electrical sheet and strip

Steel castings (unworked)

Steel tubes (seamless and welded, and steel tube fittings)

Tinmill products

Zinc- and other-coated sheet and strip

A flat steel product is typically made by rolling steel through sets of rollers to produce the final thickness. There are two types of flat steel products:

Plate products: Vary in thickness from 10 mm to 200 mm. Plate products are used for ship building, construction, large diameter welded pipes and boiler applications.

Strip products: Can be hot or cold rolled and vary in thickness from 1 mm to 10 mm. Thin flat products are used in automotive body panels, domestic white goods (for example, refrigerators and washing machines), steel (or tin) cans, and a number of other products from office furniture to heart pacemakers.

A long product is a rod, a bar or a section. Typical rod products are the reinforcing rods used in concrete, engineering products, gears, tools etc. are typical of bar products and. Sections are the large rolled steel joists (RSJ) that are used in building projects. Wire-drawn products and seamless pipes are also part of the long products group.

Modern steels are made with varying combinations of alloy metals to fulfill many purposes.

Carbon steel, composed simply of iron and carbon, accounts for 90% of steel production

High strength low alloy steel has small additions (usually < 2% by weight) of other elements, typically 1.5% manganese, to provide additional strength for a modest price increase

Low alloy steel is alloyed with other elements, usually molybdenum, manganese, chromium, or nickel, in amounts of up to 10% by weight to improve the hardness of thick sections

Stainless steels and surgical stainless steels contain a minimum of 11% chromium, often combined with nickel, to resist corrosion (rust). Some stainless steels are magnetic, while others are nonmagnetic. During World War II, the nickel content of steel was cut back, and after the war ended it did not come back up. That is why pre-war steel was better, and why classic automobiles made prior to the war tend to last longer than the later models

Tool steels, which are alloyed with large amounts of tungsten and cobalt or other elements to maximize solution hardening. This also allows the use of precipitation hardening and improves the alloy's temperature resistance. Tool steel is generally used in axes, drills, and other devices that need a sharp, long-lasting cutting edge. Other special-purpose alloys include weathering steels such as Cor-ten, which weather by acquiring a stable, rusted surface, and so can be used un-painted

Maraging steel is alloyed with nickel and other elements, but unlike most steel contains almost no carbon at all. This creates a very strong but still malleable metal.

Twinning Induced Plasticity (TWIP) steel uses a specific type of strain to increase the effectiveness of work hardening on the alloy.

Eglin Steel uses a combination of over a dozen different elements in varying amounts to create a relatively low-cost metal for use in bunker buster weapons.

Hadfield steel (after Sir Robert Hadfield) or manganese steel contains 12-14% manganese which when abraded forms an incredibly hard skin which resists wearing. Examples include tank tracks, bulldozer blade edges and cutting blades

Galvanized steel, though not an alloy, is a commonly used variety of steel which has been hot-dipped or electroplated in zinc for protection against rust

Most of the more commonly used steel alloys are categorized into various grades by standards organizations. Such a sample classification is:

Carbon steel (≤2.1% carbon; low alloy)

Stainless steel (+chromium)

Maraging steel (+nickel)

Alloy steel (hard)

Tool steel (harder)