Indian Scenario
- With the domestic steel
industry picking up during the past year and
prices moving up in leaps and bounds, India
has emerged as the world's largest producer
of sponge iron (or direct reduced iron), accounting
for around 16 per cent of the global output.
- India is the global leader
with a production of 8.07 million tons (Year
2004), followed by Venezuela with 6.9 million
tons.
- Sponge iron is used to make
steel by all Indian steel producers and is a
substitute for steel melting scrap.
- Healthy demand growth in steel sector is also pushing sponge iron demand. Apart from declining availability of steel melting scrap, sponge iron demand has also gone up considerably and is likely to continue.
- About 45% of the domestic output is through EAF (Electronic Arc Furnace) route. However, going forward this is slated to increase. With steel production is likely to grow at 6%-7%, the demand for sponge iron is likely to grow at more than 10 percent till the year 2007 and then expected to stabilize at 8 percent after that.
Factors Influencing Demand & Supply of Steel Long and
Steel Flat
-
The demand for steel is dependent on the overall health of the economy and the
infrastructure developmental activities being undertaken.
-
The steel prices in the Indian market primarily depend on the domestic demand
and supply conditions, and international prices.
-
Government and different producer and consumer associations regularly monitor
steel prices.
-
The duty imposed on import of steel and its fractions also have an impact on
steel prices.
-
The price trend in steel in Indian markets has been a function of world's
economic activity.
-
Prices of input materials for iron and steel such as power tariff, freight
rates and coal prices, also contribute to the rise in the input costs for steel
making.
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