Indian Stainless Steel Industry on the Move >>>>>>> Nirmal Mathur Senior Advisor, Jindal Stainless Limited
Contents Global SS Industry Raw Materials India Stainless Showcase What next Jindal Stainless An overview The Curvy Backbone The Shining story Delhi Metro The Indian Uprising Fuel for Growth
Global SS Industry An Overview
Stainless Steel Crude Production by Regions 1,000 tonnes 35,000 30,000 25,000 20,000 15,000 10,000-1.0% +7.8% +10.4% 22,840 19,187 20,690 +7.6% -0.1% 24,570 24,546 +16.9 28,706-2.0% 28,146-6.8% -5.0% 26,218 24,904 +24.8 31,090 +3.3 32,110p 5,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(p) China Asia w/o China W. Europe/Africa Americas Central + East Europe 4 Source : ISSF
Stainless Steel Crude Production by Grade Category % Series 2005 2006 2007 2008 2009 2010 2011 200 Series 11 10 13 13 14 13 14 300 Series 62 65 57 57 57 55 57 400 Series 25 23 28 28 28 30 28 Others 2 2 3 3 1 2 2 5 Source : ISSF
China : The Change Driver Source : ISSF
Stainless Steel : Global End Use pattern Source : SMR
Top 20 SS Flat Producers, 2011 Source : SMR Source : SMR 8
Raw Materials The Curvey Backbone
Raw Materials : Ni Trend (USD/MT) 60,000 50,000 40,000 30,000 20,000 10,000 - Source : Metalprices 10
Raw Materials : Ferro Chrome Trend 6000 5000 4000 3000 2000 1000 0 HC FeCr Prices, USD/MT Source : Metalprices 11
Raw Materials : Scrap Trend 700 600 500 400 300 200 100 0 Scrap Prices : USD/ MT Source : Metalprices 12
Metals Price Volatility,Since 1990 Source : Metalytics Nickel (key Raw Material for Stainless Steel) trades over a wider Price Range than other base Metals. 13
Stainless Steel Raw Materials : Price Volatility : (2000 2010) Over the last 10 years, Raw Materials Prices and Volatility have increased tremendously. Source : ISSF 14
India The Shining Story
India Poised for Strong Economic Growth The Indian economy is poised for rapid growth : By 2020, estimates suggest that Indian GDP could rise to USD 4 trillion, taking India to fourth place behind the US, China and Japan by size of economy High level of Infra spending High consumer spending in areas like housing, auto and consumer durables 4,500 3,000 1,500 0 USD Bn 480 To reach USD 4trillion by 2020 GDP- Gross Domestic 4,000 Product (US$ Bn) 810 1,538 2,777 Source: CIA World Factbook, IMF 16
Increasing Consumer Spend Driving Economic Growth Growth Consumption Spending by 2020 6 5 4 3 2 1 0 x times 2010 consumption spending 6,000 5,000 4,000 3,000 2,000 1,000 0 3,339 GDP Per Capita on PPP basis (USD) Year 10-16E 3,608 3,893 4,214 4,571 4,965 5,398 2010 2011 2012 2013 2014 2015 2016 Construction sector expected to grow by 22% annually & would reach USD 335 billion by 2016 Auto component sector expected to rise 17% annually to reach USD 84 billion by 2020 Electronics sector CAGR to be around 23% to reach USD 363 billion by 2015 Source: Goldman Sachs Global Economics Research, IMF 17
Global Stainless Steel Consumption per Capita Stainless Steel Consumption Per Capita (Kg) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0-5.0 China: 7.5 India: 2.1 Korea: 24.1 Italy: 16.8 Japan: 12.7 Taiwan: 33.5 Singapore: 16.8 Germany: 13.8 Switzerland: 10.9 Canada: 4.2 USA: 3.9 Low per capita consumption of SS in India is an opportunity for growth -10000.0 0.0 10000.0 20000.0 30000.0 40000.0 50000.0 60000.0 World Avg. 4 kg GDP Per Capita at PPP, USD Source: IMF, CRU Reports, Note: All values for 2010, Size of the circles is proportional to the population count for 2010 18
Stainless Steel Consumption Pattern (%) 80 70 71 India World 60 50 40 30 33 27 20 10 8 6 8 6 12 16 4 3 6 0 19
Stainless Showcase Delhi Metro
Stainless Showcase : Delhi Metro
Stainless Showcase : Delhi Metro
Stainless Showcase : Delhi Metro
Stainless Showcase : Delhi Metro
Stainless Showcase : Delhi Metro
Stainless Showcase : Delhi Metro
What Next The Indian Uprising
India s SS Consumption Growth to Exceed Global growth 3,335 23,817 22,150 21,200 25,641 34,126 1,817 1,537 1,575 2,100 2007 2008 2009 2010 2015 2007 2008 2009 2010 2015 World SS consumption (Flat + Long) in 000 MT India SS consumption (Flat + Long) in 000 MT Indian SS consumption is expected to grow by 9.7% annually and would reach around 3.4 million tons by 2015 28
New Development Areas for Stainless Steel ABC SS roofing sheets Decorative and color coated SS Street furniture Escalators, elevators Claddings Railings Airports Railway station up gradation ART Luxury Bus bodies Auto chassis, trims, suspension parts, fuel tanks, catalytic convertors Railway wagons and coaches Metro coaches Process & Engineering Nuclear grade SS for fuel containment and waste handling Super critical boilers in power plants Water treatment and drinking water supply Desalination applications Consumer Durables India as hub for white goods manufacturing SS used as components 29
18.00% Sector Growth : Auto (Production) Production 2010-11 16.00% CAGR (fy05 - fy11) 16.26% 14.00% 12.00% 12.70% 13.41% 13.48% 2.7 Mill 10.00% 0.72 Mill 8.00% 0.68 Mill 6.00% 12.1 Mill 4.00% 2.00% 0.00% Two Wheelers Commercial Vehicles Three Wheelers Passenger Vehicles Source : SIAM 30
Passenger Traffic : Indian Railways CAGR (1950-2010) 4.6% CAGR (2010-2020) 10.8% 3,000 2,500 2,391 2,000 1,500 1,000 950 500-457 296 209 67 78 118 1950 1960 1970 1980 1990 2000 2010 2020 (e) Passenger kms (Billion) Source : Research Design & Standards Organization (RDSO) 31 31
Freight Traffic : Indian Railways CAGR (1950-2010) 3.8% CAGR (2010-2020) 12.4% 3,000 2,500 2,387 2,000 1,500 1,000 500-833 504 341 93 156 197 220 1950 1960 1970 1980 1990 2000 2010 2020 (e) Tonnes (Million) Source : Research Design & Standards Organization (RD 32 32
Emerging Applications Buildings Building Interiors, Gates, Windows, Decorative Kitchen Appliances, Cook top, Chimney, Tiles Street Furniture Bus Shelter, Seating Spaces, Railings
Jindal Stainless Fuel for Growth
Jindal Stainless : India s Largest Integrated Stainless Mill Advanced Stainless Steel melting & Hot Rolling Technology State of Art cold rolling facilities in India and Indonesia Ferro Alloys Manufacturing & Power Generation Global distribution network with own service centers Mining ventures and ore linkages MINES TO MINT Leader in Domestic Market with wide product range 35
Hisar Plant : Pioneer of Stainless Steel Hisar Plant with 780,000 tons Stainless Steel capacity Hisar Plant Facilities Capacity (MT) 780,000 MT SMS 780,000 HR-Steckel 720,000 400,000 MT 250,000 MT Till 2004 Till 2000 2011 HR - Tandem Strip Mill 250,000 HRAP & Plate 235,000 Cold Rolling 275,000 Special Products 25,000 Coin Blanking 10,000 Ferro Chrome Vizag plant (Integrated with Sukhinda chrome mines) 40,000 World s largest producer of Razor Blade Steel 36
Odisha Plant : The Future of Stainless Steel SMS 1,000,000tpa Hot Strip Mill 1,600,000tpa (Expandable to 4,000,000tpa) Mill Plate &AP 100,000tpa HAPL 950,000tpa CRAP 450,000tpa 37
Odisha Plant : An Overview
Integration with extensive coverage PT Jindal Stainless (Indonesia) Cold Rolling Unit Jindal Stainless Steelway Ltd Stainless Steel Service Centers Jindal Architecture Ltd Turnkey solutions in SS for ABC, JSL Lifestyle Ltd Lifestyle Products Iberjindal (Spain) International SS Service centre 39
Jindal Stainless - Fuel for Growth High Level of Integration from Mining to Manufacturing State of the Art Technologies the QUALITY Advantage Wise Spectrum of productss Precision Strips, Blade Steels & Coin Blanks Market development of new appalications 40
Indian Stainless Steel Industry Outlook Prospects High growth economy Increasing SS consumption Growth Area ABC (Architecture, Building & Construction) New Applications Challenges Indian Infrastructure China Capacities RM Volatility 41
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