PROCUREMENT OF

STEEL
IN
ASIAN COUNTRIES
Prepared By-
Sakshi Gupta (34)
Barkha Vig (12)
Country Background-China
Population 1,355,692,576 (July 2014 est.)
Age-Structure 0-14 years: 17.1% (male 124,340,516/female 107,287,324)
15-24 years: 14.7% (male 105,763,058/female 93,903,845)
25-54 years: 47.2% (male 327,130,324/female 313,029,536)
55-64 years: 11.3% (male 77,751,100/female 75,737,968)
65 years and over: 9.6% (male 62,646,075/female 68,102,830)
(2014 est.)
Population Growth Rate 0.44% (2014 est.)
Urbanization urban population: 50.6% of total population (2011)
rate of urbanization: 2.85% annual rate of change (2010-15 est.
Major Cities of Population Shanghai 20.208 million; BEIJING (capital) 15.594 million;
Guangzhou 10.849 million; Shenzhen 10.63 million;
Chongqing 9.977 million; Wuhan 9.158 million (2011)
Sex Ratio at birth: 1.11 male(s)/female
0-14 years: 1.16 male(s)/female
15-24 years: 1.13 male(s)/female
25-54 years: 1.05 male(s)/female
55-64 years: 1.06 male(s)/female
65 years and over: 0.92 male(s)/female
total population: 1.06 male(s)/female (2014 est.)
Religion Buddhist 18.2%, Christian 5.1%, Muslim 1.8%, folk religion
21.9%, Hindu < .1%, Jewish < .1%, other 0.7% (includes Daoist
(Taoist)), unaffiliated 52.2%
note: officially atheist (2010 est.)
Literacy definition: age 15 and over can read and write
total population: 95.1%
male: 97.5%
female: 92.7% (2010 est.)
Country Background (Geography)



Location Eastern Asia, bordering the East China Sea, Korea Bay, Yellow Sea,
and South China Sea, between North Korea and Vietnam
Land Boundaries total: 22,457 km
border countries: Afghanistan 91 km, Bhutan 477 km, Burma 2,129
km, India 2,659 km, Kazakhstan 1,765 km, North Korea 1,352 km,
Kyrgyzstan 1,063 km, Laos 475 km, Mongolia 4,630 km, Nepal 1,389
km, Pakistan 438 km, Russia (northeast) 4,139 km, Russia
(northwest) 40 km, Tajikistan 477 km, Vietnam 1,297 km
regional borders: Hong Kong 33 km, Macau 3 km
Coastline 14,500 km
Climate extremely diverse; tropical in south to subarctic in north
Natural Resources coal, iron ore, petroleum, natural gas, mercury, tin, tungsten,
antimony, manganese, molybdenum, vanadium, magnetite,
aluminum, lead, zinc, rare earth elements, uranium, hydropower
potential (world's largest)
Total Renewable Water Resources 2,840 cu km (2011)
Natural Hazards frequent typhoons (about five per year along southern and eastern
coasts); damaging floods; tsunamis; earthquakes; droughts; land
subsidence
volcanism: China contains some historically active volcanoes
although most have been relatively inactive in recent centuries
Environmental-International Agreements Antarctic-Environmental Protocol, Antarctic Treaty, Biodiversity,
Climate Change, Climate Change-Kyoto Protocol, Desertification,
Endangered Species, Environmental Modification, Hazardous Wastes,
Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship
Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
Geography- Note world's fourth largest country (after Russia, Canada, and US) and
largest country situated entirely in Asia; Mount Everest on the
border with Nepal is the world's tallest peak

PEST ANALYSIS OF STEEL INDUSTRY IN CHINA
P
E
S
T
Political risk in China is low as compared to other emerging economies because there is
stability with one-party system
Transparency in business is a huge issue in China and is perhaps the biggest single issue
for foreign companies, which makes foreign investments in steel industry little less as
compared to other sectors
The current unemployment rate in China is 4.3% which demonstrates that the Steel
Industry would help the society and in turn the economy by creating positive job-
opportunities,
Growth in global energy consumption from wind and solar since 2000 has been
approximately half of the increase in energy consumption by China's steel sector alone.
About 1 billion tonnes of coal is used to produce steel, representing 14% of total coal
production, with steel and iron production equating to over 6% of global carbon dioxide
emissions. This figure is much higher than that of the aviation industry,
Second largest economy in the world, China is 18
th
fastest growing economy in the
world, with a real GDP growth rate of 7.8%
This sector exported a total of USD36.82 billion worth of iron and steel products in 2013,
making iron and steel the 8
th
ranking major export products of China
China is a global hub for manufacturing, and is both largest manufacturing economy in
the world and the largest exporter of goods
Country Background-India
Population 1,236,344,631 (July 2014 est.)
Age Structure 0-14 years: 28.5% (male 187,016,401/female 165,048,695)
15-24 years: 18.1% (male 118,696,540/female 105,342,764)
25-54 years: 40.6% (male 258,202,535/female 243,293,143)
55-64 years: 7% (male 43,625,668/female 43,175,111)
65 years and over: 5.8% (male 34,133,175/female 37,810,599)
(2014 est.)
Population Growth Rate 1.25% (2014 est.)
Urbanization urban population: 31.3% of total population (2011)
rate of urbanization: 2.47% annual rate of change (2010-15 est.)
Major Cities Population NEW DELHI (capital) 22.654 million; Mumbai 19.744 million;
Kolkata 14.402 million; Chennai 8.784 million; Bangalore 8.614
million; Hyderabad 7.837 million (2011)
Sex Ratio at birth: 1.12 male(s)/female
0-14 years: 1.13 male(s)/female
15-24 years: 1.13 male(s)/female
25-54 years: 1.06 male(s)/female
55-64 years: 1.08 male(s)/female
65 years and over: 0.91 male(s)/female
total population: 1.08 male(s)/female (2014 est.)
Literacy definition: age 15 and over can read and write
total population: 62.8%
male: 75.2%
female: 50.8% (2006 est.)
Religion Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other
1.8%, unspecified 0.1% (2001 census
Country Background (Geography)


Location Southern Asia, bordering the Arabian Sea and the Bay of
Bengal, between Burma and Pakistan
Land Boundaries total: 13,888 km
border countries: Bangladesh 4,142 km, Bhutan 659 km,
Burma 1,468 km, China 2,659 km, Nepal 1,770 km, Pakistan
3,190 km
Coastline 7,000 km
Climate varies from tropical monsoon in south to temperate in north
Coal coal (fourth-largest reserves in the world), iron ore,
manganese, mica, bauxite, rare earth elements, titanium
ore, chromite, natural gas, diamonds, petroleum, limestone,
arable land
Total renewable water resources 1,911 cu km (2011)
Natural Hazards droughts; flash floods, as well as widespread and destructive
flooding from monsoonal rains; severe thunderstorms;
earthquakes
Environment-International Agreements Antarctic-Environmental Protocol, Antarctic-Marine Living
Resources, Antarctic Treaty, Biodiversity, Climate Change,
Climate Change-Kyoto Protocol, Desertification, Endangered
Species, Environmental Modification, Hazardous Wastes,
Law of the Sea, Ozone Layer Protection, Ship Pollution,
Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling
Geography- Note dominates South Asian subcontinent; near important Indian
Ocean trade routes; Kanchenjunga, third tallest mountain in
the world, lies on the border with Nepal
P
E
S
T
National Steel Policy to remove bottlenecks
With the growing industry, the government has increased sales tax from 15% to 20%
whereas 75% FDI is allowed in the industry .
With the coming of stable government, government is encouraging to use the full
opportunities available in Public and Private Partnership (PPP)
Under the various economies scheme, there is permission in advance licensing scheme
which allows the duty free imports of raw materials for exports.
Steel Industry contributes 1.2% in total GDP, and with increase in GDP growth rate, this
sector is expected to perform well.
It is expected that India will enjoy expected average growth of 5.5% annually
Changing life-style in the urban as well as rural areas has led in the increase of various
commodities requiring steel as the raw-material, resulting in the increased demand for
steel
Steel industry employs large number of people, leading to the development of people as
well as the community
Traditional technologies have been used for years; no-innovation
Tata and SAIL have introduced online trading of steel
SAIL is planning to set up a plan with PASCO for using the latest technology named
FINEX for the steel production in the coming years. This will decrease the cost of
production by 15%
PEST ANALYSIS OF STEEL INDUSTRY IN INDIA

LEADING STEEL COUNTRY IN ASIA

China is worlds largest crude steel producer in 2013
(779 mt) followed by Japan (1110.6 mt).
China took 48.5% of world steel production in 2013
2013 is set to be a stronger year with output for the first
quarter rising by 8.4%.
Today, India is the 4th largest crude steel producer of
steel in the world.
Per capita finished steel consumption in 2013 is
estimated at 225 kg for world and 515 kg for China.
Rapid rise in production has resulted in India becoming
the 4th largest producer of crude steel and the largest
producer of sponge iron or DRI in the world.


779
110.6
3.5
81.2
5.4
15.4
Crude steel production (million metric tons)-2013
China
Japan
Thailand
India
Saudia Arbia
Iran
Indian steel industry : Production for Sale (in million tonnes)
Category 2009-10 2010-11 2011-12 2012-13 2013-14
Pig Iron 5.88 5.68 5.371 6.870 7.950
Sponge Iron 24.33 25.08 19.63 14.33 18.20
Total Finished Steel (alloy + non alloy) 60.62

68.62 75.70 81.68 87.67
Source: Joint Plant Committee

India is the largest producer of sponge iron in the world with
the coal based route accounting for 88% of total sponge iron
production in the country.
In 2013-14, production for sale of total finished steel (alloy +
non alloy) was 87.67 mt.
Production for sale of Pig Iron in 2013-14 was 7.95 mt.



Source:- http://steel.nic.in/overview.htm


BIGGEST STEEL PRODUCER IN ASIA
Acc. To World Steel Association
RANK COMPANY NAME TONNAGE (Mt.)
3 Hebei Steel Group 45.8
4 Baosteel Group 43.9
5 Wuhan Steel Group 39.3
7 Jiangsu Shagang Group 35.1
8 Ansteel Group 33.7
RANK COMPANY NAME TONNAGE (Mt.)
11 TATA Steel group 25.3
26 SAIL 13.5
Major Steel Producer in China
Major Steel Producer in India

Source-
http://www.steelads.com/info/largeststeel/TOP25_Worlds_Largest_Steel_Companies.html
http://www.worldsteel.org/statistics/top-producers.html

GOVERNMENT POLICIES FOR STEEL

China reduce tariffs on steel imports from an average 10.3 percent to 6.1 percent.

Eliminate various nontariff barriers, including import substitution measures, import quotas and Non-automatic
import licensing and import registration requirements.

Eliminate designated state trading in the steel industry.

Eliminate its prohibition on foreign companies distributing imported steel products in China or
providing related distribution services.

WTO Agreement on Subsidies and Countervailing Measures, including elimination of export subsidies and
import substitution subsidies.

Chinas council, provincial and local government mandatory to involved in decision making in steel industries.
CHINA
Source:-Global Steel Trade: Structural Problems and Future Solutions

GOVERNMENT POLICIES FOR STEEL
Steel are freely exportable and importable as per the Extant Policy and Excise duty is 12%

No permission is required for raising foreign exchange loans from abroad by mortgaging the vessels with the
lender.

W.e.f. 24.5.92, Steel industry has been included in the list of `high priority' industries for automatic approval for
foreign equity investment upto 51%. This limit has been recently increased to 100%.

To check unbridled cheap imports of steel the Government has fixed floor prices for seven items of finished steel
viz. HR coils, HR sheets, CR coils, Tinplates, CRNO and ASBR.

An Inter-Ministerial Group (IMG) is functioning in the Ministry of Steel, under the Chairmanship of Secretary
(Steel) to monitor and coordinate major steel investments in the country.

The Centre's Steel Development Fund (SDF) and Plan Scheme presently provide financial assistance for R&D in
the sector.

The government has also imposed export duty of 30% on all forms of iron ore and 5% on iron ore pellets in order
to control ad-hoc exports of the mineral and conserve it for long term requirement of the domestic steel industry.


Source:-http://www.business-standard.com/article/companies/new-steel-policy-in-6-
months-for-fast-growth-of-sector-112032300173_1.html
INDIA