India Metals Report

Published 16 December 2014

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India Metals Report

BMI View: India is set to become a major consumer of metals over the coming years as the government makes substantial efforts to improve infrastructure in the country . That said, major roadblocks concerning the availability of raw materials and institutional weaknesses will continue to hinder growth in the metals industry.

In contrast to the dimming outlook in major steel-producing countries, we believe India's steel sector is on track to experience healthy growth over our forecast period to 2018. While steelmakers in countries including China, Japan and South Korea are struggling with overcapacity and sluggish steel demand, the fortunes for Indian steelmakers are much more positive.

We expect India to become a major consumer of metals over the medium term. The growing affluence of the population will spur spending on housing and white goods in the coming years. Crucially, the pro-business Bharatiya Janata Party (BJP) has pledged to push ahead with a mandate of sweeping economic reforms that will revive investor confidence in the country. We believe efforts to slim down bureaucracy and merge departments will improve the coordination between ministries and provide a springboard for pending infrastructure projects. Subsequently, this will trickle down to the metals industry as demand for construction-related materials including steel, aluminium and nickel increases.

Steeled For Growth
India - Select Metals Production (% chg y-o-y)

That said, we are aware that several roadblocks will continue to hinder growth in India's steel sector. The ongoing clampdown on illegal iron ore mining will force a handful of steelmakers to shift their sights onto the seaborne market for supply. Additionally, the pervasiveness of graft, excessive red tape and the glacial pace of project execution will remain obstacles to infrastructure build-out and foreign direct investment in the coming quarters.

Over the past decade, a growing number of Indian steelmakers have embarked on...

Table of Contents

BMI Industry View
7
SWOT
9
Metals SWOT
9
Industry Forecast
10
Aluminium: Slipping Into Deficit
10
Consumption Growth Edging Higher
12
Environmental Concerns A Key Threat
12
Copper: Output Growth To Pick Up
13
Table: India - Refined Copper Production, Consumption & Balance (2012-2018)
15
Steel: Growth Outperformer, But Hurdles Remain
16
Table: India - Steel Production, Consumption & Balance (2012-2018)
22
Table: India - Steel Prices Historical Data
22
Table: India - Steel Industry Historical Data (kt)
22
Zinc: Output Expansion
24
Table: India - Refined Zinc Production, Consumption & Balance (2012-2018)
28
Regulatory Development
29
Table: Political Overview
32
Commodities Forecast
34
Table: BMI Steel Price Forecast
34
Short-Term Outlook (three-to-six months)
34
Long-Term Outlook
35
Production Growth Set For Slowdown
36
Consumption Growth To Disappoint
37
Downside Risks To Price Outlook
38
Table: Steel Data & Forecasts
39
Commodity Strategy
40
Ferrous Metals
40
Non-Ferrous Metals
42
Aluminium: Sustained Break Unlikely
42
Copper: Prices To Decline Further By 2015
43
Nickel: Increase From Current Lows, But No Return To H114 Highs
45
Zinc: Tighter Supplies To Be Offset By Subdued Demand
47
Table: Select Commodities - Performance & BMI Forecasts
48
Competitive Landscape
50
Table: Financial Data Of Key Metal Firms Listed In India
50
Company Profile
52
National Aluminium Company (NALCO)
52
Table: Nalco - Top Suppliers
54
Table: NALCO - Key Financial Data
55
Steel Authority of India Ltd (SAIL)
56
Table: SAIL - Supply Chain Analysis
58
Table: SAIL - Key Financial Data
59
Tata Steel Limited
60
Company Overview
61
Company Strategy
61
Table: Tata Steel - Key Financial Data
63
Vedanta Resources
64
Latest Financial Results
66
Company Strategy
66
Table: Vedanta Resources - Supply Chain Analysis
67
Company Details
68
Table: Vedanta Resources - Key Financial Data
68
Methodology
70
Cross Checks
70

The India Metals Report has been researched at source, and features latest-available data for steel, aluminium and other major globally-traded commodities. Our analysis covers all primary indicators, including production, exports and price, with our forecasts underpinned by Business Monitor International (BMI)'s macroeconomists global economic outlook. The report analyses trends and prospects and critically evaluates latest industry news, trends and regulatory developments in India.

BMI's India Metals Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the metals industry in India.

Key Benefits

  • Benchmark BMI's independent metals industry forecasts for India to test other views - a key input for successful budgeting and strategic business planning in the India metals market.
  • Target business opportunities and risks in India through our reviews of latest industry trends, regulatory changes and major projects and investments.
  • Exploit the latest competitive intelligence and company profiles on your competitors and peers.

Coverage

BMI Industry View

A comprehensive summary of the impact and implications of the latest regulatory developments and key forecast indicators covering metals production, consumption and upside/downside risks to our outlook. The Metals SWOT analysis outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.

Industry Forecast

Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:

  • Steel: Steel production & consumption (‘000 tonnes).
  • Aluminium: Aluminium consumption production & balance (‘000 tonnes).
  • Copper: Refined copper production & consumption (‘000 tonnes).
  • Zinc: Refined zinc production & consumption (‘000 tonnes).
  • Lead: Refined Lead production, consumption & balance (‘000 tonnes).
  • Nickel: Refined nickel production & consumption (‘000 tonnes).
  • Tin: Refined tin production, consumption & balance (‘000 tonnes).

Regulatory Development

Details of the industry regulatory framework, relevant key legislation and environmental standards that impact the metals industry. The regulatory developments section provides analysis of the overall regulatory burden, the tax regime (including income tax rates), bureaucratic framework, corruption and a country specific political overview. Details of the industry regulatory framework provide information on relevant key legislation and regulations that will impact the metals industry.

Commodities Forecast

Provides in depth coverage and forecasting of steel prices and includes BMI’s core view of what to expect in upcoming months. Within the monthly metals update, BMI provides performance data and key forecasts for select commodities, including prices for aluminium, copper, gold, iron ore, lead, nickel, palladium, platinum, silver, steel (MEPS Carbon Steel), tin and zinc.

Competitive landscape

The competitive landscape section provides comparative company analyses of detailed financial data for key listed metals firms, ranked in order of market cap (USDmn).

Company Profiles*

Examines the competitive position and short to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects. Details of products and services provide a full overview of each company’s operations.

Sources

The Metals Reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc