Project on Steel Industry:Introduction: Steel is an alloy of iron and carbon containing less than 2% carbon and 1% manganese and small amounts of silicon, phosphorus, sulphur and oxygen. Steel is the most important engineering and construction material in the world. It is used in every aspect of our lives, from automotive manufacture to construction products, from steel toecaps for protective footwear to refrigerators and washing machines and from cargo ships to the finest scalpel for hospital surgery. Steel is made via two basic routes - from raw materials - iron ore, limestone and coke by the blast furnace and basic oxygen furnace route or from scrap via the electric arc furnace (EAF) method. The raw material approach is known as the integrated route and about 60% of steel produced today is made by this method. The second technique is much easier and faster since it only requires scrap steel. Recycled steel is introduced into a furnace and re-melted along with some other additions to produce the end product. About 34% of steel produced in 2003 was produced via the EAF route. A flat steel product is a plate product or a (hot or cold) rolled strip product. Typically steel is rolled between sets of rollers to produce the final thickness. Plate products vary in dimensions from 10 mm to 200 mm and thin flat rolled products from 1 mm to 10 mm. Plate products are used for ship building, construction, large diameter welded pipes and boiler applications. Thin flat products find end use applications in automotive body panels, domestic 'white goods' products, 'tin cans' and whole host 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 for 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 construction projects. Wire-drawn products and seamless pipes are also part of the long products group. Profile of the Indian Iron and Steel Industry: Why Steel: Steel is crucial to the development of any modern economy and is considered to be the backbone of the human civilization. The level of per capita consumption of steel is treated as one of the important indicators of socio-economic development and living standard of the people in any country. It is a product of large and technologically complex industry having strong forward and backward linkages in terms of material flow and income generation. All major industrial economies are characterized by the existence of a strong steel industry and the growth of many of these economies has been largely shaped by the strength of their steel industries in their initial stages of development.

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The great Indian Steel journey: Modest beginnings: prior to Independence (1907-1947) The Indian iron and steel Industry is now almost a century old. At the time of independence in 1947, India already had a small but viable iron and steel capacity of around 1 million tonne per annum, thanks mainly to the patriotic zeal of a few entrepreneurs of outstanding stature such as Sir Jamshedji Tata, Dr Visvesvaraya and Sir R N Mukerjee. The entire capacity of the nascent iron and steel industry was in the private sector. Chronology of the early steel plants in the private sector: Tata Iron and Steel Company, 1907 Mysore Iron and Steel Company, (later renamed Vivesvaraya Iron & Steel Ltd), 1923 Steel Corporation of Bengal (later renamed Martin Burn Ltd and Indian Iron & Steel Ltd) 1923 Steel Corporation of Bengal (later renamed Martin Burn Ltd and Indian Iron and Steel Co), 1939 Towards planned growth: (1956-1968) The first three five year plans and the prolific growth in capacity under the aegis of the public sector. The first push to this industry came during the first three five year plans (1952-1970). Massive injections of investment in public sector coupled with a protected market environment laid the foundations of a viable and competitive indigenous iron and steel industry. Thus came into being the so-called temples of modern India. The journey thereafter The growth of the steel industry went on and the policy parameters guiding it till 1992 were: Capacity Licensing: reservation of large scale integrated capacity (above 1 million tonne) for the public sector Dual Pricing System: price and distribution controls for both public and private sector integrated plants while keeping the secondary sector steel producers out of the ambit of price control Protection to domestic industry: tariff barrier, volume based import control through licensing of imports Balanced regional growth: promoted through a system of equalized railway freight for all steel deliveries irrespective of distanceThe Indian Iron & Steel Company (IISCO), a subsidiary of SAIL since its nationalisation in 1972, has been producing mainly pig iron for lack of adequate steel making facilities

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Proposals for modernization of this plant are under consideration Total capacity in the public sector was approximately 11 million tonnes in 1992, just prior to the launch of economic reforms The edifice on which growth took place The institutions created for supporting and implementing the policy of regulated growth: The Office of the Iron and Steel Controller, later renamed Office of the Development Commissioner for Iron and Steel under the aegis of the Ministry of Steel. The Joint Plant Committee (JPC), an autonomous body under the chairmanship of the DCI&S, with representation from the integrated steel plants and the Ministry of Railways in its capacity as a significant consumer of steel. The regulatory framework Administered price for the products of integrated steel plants and its different elements. 1. Normated cost of production plus return to capital 2. Other mandated add-ons to administered price i.e., JPC Cess: a levy of Re 1/tonne of steel produced by the integrated steel plants, later raised to Rs 3/tonne. Levy for SDF: a levy on sales of steel by the integrated steel plants for the creation of a circulating fund for financing developmental work/modernization of integrated plants at soft interest rates, - initiated with Rs 100/- per tonne at the time of its discontinuation in 1994. Levy for Engineering Goods Export Assistance Fund: a levy imposed per tonne of steel sold by the integrated plants to create a fund whereby exporters of engineering goods were to be reimbursed for the difference between the (lower) international price of steel and the (higher) domestic controlled price - discontinued in 1992. Equalized railway freight: an uniform railway freight applicable to all steel producers, irrespective of distance - fixed in a manner to compensate the steel producers for the subsidies given to distant customers. Import Pool Fund: A fund created by mopping up the balance between the lower international procurement prices with higher domestic sales prices for selected categories of steel being imported by the canalizing agencies under import licensing. Price fixation for controlled items (initiated for steel in 1923 through tariff protection) Distribution of steel according to laid out societal principles.

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Deciding on the import/export plans based on domestic demand and planned domestic availability Custodianship for collection and disbursal of the revolving 'Steel Development Fund' (SDF) to support developmental activities and capital expenditure programmes of the integrated steel producers at concessional interest rates and providing rebates to the small scale industrial units through the Small Scale Industrial Corporation (SSIC) Custodianship of the Engineering Goods Export Assistance Fund (EGEAF) for the purpose of providing steel at international prices to exporters of engineering goods Custodianship of the Import Pool Fund Created by mopping up the balance between the lower procurement price of imported HR coil and pig iron and the higher administered domestic sale prices charged by the canalizing agencies Fixation of the equalized railway freight rates in order to supply material at the same price throughout the country - the equalized rates being fixed such that the subsidies given to users in distant locations balance out the extras charged to proximate consumer Come seventies: Enter the secondary sector: Emergence of the small-scale secondary steel producers in the private sector to bridge the gap between rising demand and stagnating supply from the existing integrated plants. From the mid-seventies, outlays on capacity creation/modernization in the public sector slowed down significantly due to the resource crunch faced by the State and the resultant reduction in the plan/budgetary outlay in the public sector steel units. Slower growth in internal resource generation by the public sector plants arising out of structural rigidities and other inefficiencies, which affected not only the steel industry but also macro-economy as a whole.The seventies, therefore, saw the proliferation of ferrous scrap iron/ DRI based small scale electric steel producers (electric arc furnace and induction furnace units), which came up to satisfy the excess demand created by shortage of supply over demand. The semi finished ingots/billets produced in the emergent secondary sector led to the commissioning of a large number of re-rolling units to convert semi finished steel to bars and rods used mainly in the construction industry. The economic liberalization to the present times: The growth of the private sector Deregulation of the steel sector - private sector taking the lead in creation of fresh large scale capacity.The private sector entrepreneurs responded magnificently to the deregulation of the iron and steel sector (i.e., decontrol of price, distribution and capacity, withdrawal of import and export restrictions etc.) which formed part of the general programme of economic reforms of the Indian economy, started in 1991. The immediate post reform years toted up some remarkable The largest ever decadal additions to capacity to the tune of 12 almost all of which has been in the private sector. Unprecedented consumption of steel Most importantly a quantum jump in exports achievements: million tonnes, increase in the as a result of

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global integration of this industry and the consequent emergence of India as a net exporter of steel A significant rise in the flow of foreign direct investment in this sector Following the deregulation of the iron and steel sector, 21 new projects based on state-of-art technologies have been taken up, increasing the total capacity by about 12 million tonnes The long journey for Indian Steel Industry: Only after liberalization of steel sector, the exports of iron and steel have once again started increasing. Though the country's production of iron and steel is sufficient to meet the domestic demand, some quantity of steel however is always needed to be imported. The finished steel production in India has grown from a mere 1.1 million tones in 1951 to 26.71 million tones in 1999-2000. During the first two decades of planned economic development, i.e. 1950-60 and 1960-70 the average annual growth rate of steel production exceeded 8 per cent. However, this growth rate could not be maintained in the decades to follow. During 1970-80, the growth rate in steel production came down to 5.7 per cent per annum and picked up marginally to 6.4 per cent per annum during 1980-90. Though India started steel production in 1911, steel exports from India began only in 1964. Exports in the first five years were mainly due to recession in the domestic iron and steel market. Once domestic demand revived, exports declined. India once again started exporting steel only in 1975 touching a figure of one million tonne of pig iron export and 1.4 million tones of steel export in 1976-77. Thereafter, exports again fell rapidly to meet rising domestic demand, especially those grades and qualities which are required in small quantities and therefore do not justify setting up of production capacities. The progress of steel industry has a critical influence on the pace of India's development and as such great importance is attached to capacity expansion in line with expected demand at cost and prices, which make Indian Steel internationally competitive. The new economic policies being pursued by the Government have opened up new opportunities for the expansion of the steel industry. With a view to accelerating the growth of the steel sector, the Government has initiated a number of policy measures since 1991. The Indian steel sector - Unshackled The important policy measures which have been taken for growth and development of the Indian Iron and Steel sector are as under:In the new Industrial Policy announced in July 1991 Iron and Steel Industry, among others, was removed from the list of industries reserved for the public sector and also exempted from the provisions of compulsory licensing under the Industries (Development and Regulation) Act, 1951.With effect from 24-5-92 iron and steel industry was included in the list of 'high priority' industries for automatic approval for foreign equity investment upto 51 per cent (now 74 per cent). Price and distribution of steel were deregulated from January 1992. At the same time, it was ensured that priority continued to be accorded for meeting the

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requirements of small scale industries, exporters of engineering goods and North Eastern Region, besides strategic sectors such as Defence and Railways. The import regime for iron and steel has undergone major liberalization moving gradually from a controlled import by way of import licensing, foreign exchange release, canalization and high import tariffs; to total freeing of iron and steel imports from licensing, canalization and lowering of import duty levels. Export of iron and steel items was also freely allowed. Import duty on capital goods was reduced from 55 per cent to 25 per cent. Duties on raw materials for steel production were reduced. These measures reduced the capital costs and production costs of steel plants. Freight equalization scheme was withdrawn in January 1992, removing freight disadvantage to states located near steel plants. At the same time, it was ensured that far flung areas and distant states were protected by stipulating that beyond the freight ceiling distance, the main producers would continue to bear the freight charges. Levy on account of Steel Development Fund was discontinued from April'94 providing greater flexibility to main producers to respond to market forces. Joint Plant Committee (JPC): Post liberalization era ushered into the iron and steel sector considerable boom in consumption that was dampened by sluggishness in domestic economy in the early nineties. The turmoil that followed has hardly abated as steel companies struggle to retain a foothold in an unsteady phase. Such a situation calls forth service from some control body. It is as this juncture, that the Joint Plant Committee's (JPC) role and contribution towards the iron and steel sector becomes imperative. It was back in the year 1964, when recommendations of Dr K N Raj Committee led to the evolution of JPC - a select organization whose goal lies in the promotion of steel, coordinating work of the main producers in order to make a common platform for planning, dispatch and pricing of products, keeping the industry and those related to it, soaked in accurate information of the iron and steel world, apart from rendering support services or reviewing general market situation. Structure: JPC with its headquarters at Kolkata has four regional offices : Kolkata, New Delhi, Mumbai and Chennai. JPC at present comprises of the following members: * Joint Secretary, Ministry of Steel - Chairman * Four representatives from Steel Authority of India Ltd (SAIL)

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* One each from Tata Iron and Steel Co Ltd (TISCO), Rashtriya Ispat Nigam Ltd (RINL) and Ministry of Railway. In the much altered scenario of today, when not the composition of the industry but its operation and technology stand changed, JPC is treading through myriad diversification of activities in order to keep pace with changing times. Promotional Role: In an effort to boost steel consumption in the country that that lies limp today, JPC proposes to breathe life into it by campaigning for steel as a material for manufacture and construction. The National Campaign Committee is, therefore, formulated with JPC playing a pivotal role. In order to widen steel consumption in rural sector, JPC has ventured with Save Grain Campaign to convince and educate farmers in storing food grains in metal bins that are distributed at a subsidised rate. Training has already been imparted to farmers of various states of Orissa and Chennai. JPC has in a bid to widen steel use, taken initiatives to uphold the use of steel scaffolding replacing the traditional bamboo ones; making steel truck bodies, developing water storage tanks of stainless steel and GP sheets, promoting LPG cylinders and underground pipes of steel make, thereby confirming the verstality of steel. Publications and Database: Considering its endeavour in pervading information of iron and steel throughout the expanse of our country and abroad, JPC takes immense pride in two of its creations, its publications and database. JPC boasts about the books and periodicals, it publishes on aspects related to Iron and steel sector. Since last January, a new entrant in its list of publications, The JPC Monthly Bulletin' has quickly made its mark earning accolades from various sectors of the iron and steel world. JPC's annual performance review of iron and steel is also worth its reputation. JPC's database deemed accurate and authentic possesses statistical information, which are covered by eminent technocrats, economists and research workers. Steel Exporters' Forum: Steel Exporters' Forum, another such body, has been formed for the promotion of exports of Indian iron and steel. It was constituted to promote exports of iron and steel, to minimize the problems faced by the exporters and to fight dumping charges with the collaborative support of Ministry of Commerce and Indian steel producers. SEF is involved in the collection of international trade information, analysis of the trend of global steel trade and dissemination of the same in a regular manner. The regular publications of SEF Mail, Steel Track International newsletters of the forum are serving useful purposes for the exporters.

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Economic Research Unit (ERU): ERU, JPC is the secretariat of the Steel Exporters' Forum. A committee has been constituted by drawing members from Ministry of Steel and leading steel exporters. DCI&S is the Chairman of the Forum. The Economic Research Unit (ERU) of JPC has come forth with a view to provide assistance regarding evaluation of investments or dealing with numerous technoeconomic issues. The National Campaign Committee a producer dominated body that works for promoting steel use work in close coordination with JPC where the latter has taken a serious part. The Global Edge: In order to expand its network, JPC is working towards achieving the SEAISI (South East Asian Iron and Steel Institute) membership for the iron and steel industry, as this will certainly usher in a new avenue towards its upliftment. Though JPC has already been accorded membership as the country's steel sector, it will soon procure a full-wing membership. Once this is achieved, India will receive abundant benefits from the inter- country facilities and expert advices from countries with better technologies. As environment friendliness and competent technologies have become a buzzword, the Union Ministry by reaching up to the UNDP's GEF area for enhancing the steel industry's state. Though UNDP responded positively with $28 million the Government of India through JPC will release about $06 million. JPC Chairman and DCI&S are the National Project Coordinator of this project. The March Ahead: With its headquarters in Kolkata, JPC works maintaining affable liaison amongst its regional offices in New Delhi, Mumbai, Chennai. In addition to the contribution in such varied facets, JPC tirelessly continues to open new vistas of work that can uplift the iron and steel sector from its present morbid state; and in order to ensure fruitful result, JPC is working towards ISO standardization to acquire international quality standards in overall operation. There is no room for complacency for JPC.

Steel Making Technology in India:: The world at present is steel manufacturing its mass production of steel Converter where air was having considerable reforms in regard to technology for changes & developments. In the 18th & 19th century the was developed by using liquid Pig Iron in the Bessemere blown from the bottom at high pressure. The oxygen in

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air oxidized the impurities such as high carbon, silicon etc.. It was noted that this steel could not remove all impurities. The German scientist Siemen developed Open Hearth Furnace where the furnace was having rectangular shallow Open Hearth bath and the hot gases produced from coal gas producer were made to impinge on the hearth for hour from one side and then for hour from the other side to heat surface . face of the bath and reduce the impurities. It took 8-10 hours to produce good quality steel. The Pig Iron which contained high Silicon, Carbon etc was refined by oxidizing these elements such as silicon, carbon & phosphorous. The Siemen Open Hearth Furnaces of bigger capacities were installed all over the world. These are still used. Thus for over 100 years Siemens process of making steel in Open Hearth Furnaces was the main technology used for making steel. L.D. PROCESS Subsequently in early 1950s L.D. Process was developed by Liz of Germany and Donwitz of Austria to make steel. The oxygen instead of Air was blown in the L.D. converter from bottom similar to the Bessemere converter. Very violent exothermic reactions took place. Thereby reducing Carbon, Silicon, sulphur and Phosphorous in one operation. The process was faster. The chemistry of bath could be adjusted. This process has become now the mainstay of making steel, known as BOF. For Basic Oxygen Furnace technology, very big Capacity Basic Oxygen Furnaces have been developed. Thus a revolution has taken place in steel making in the world. Over 75% of steel in the world is now made by BOF route and the rest by Open Hearth Furnaces and Electric steel making route. SPONGE IRON The technology Is also changing as far as manufacture of pig iron is concerned. Very high quality of coking coal is needed for making the coke as redundant in the blast furnaces. The coking coal reserves in the world are decreasing. In view of the same, technologies have to be developed to use non-coking coal as redundant for the Iron Ore. Sponge Iron is produced from iron ore by using low quality coal. Big rotary kilns are used where the iron ore, coal and limestone are fed from one end of kiln. The hot air is injected in the kiln from various zones, which heat the raw materials, and a temperature is reached where the iron ore gets reduced leaving solid contents along with gange material. The hot reduced material is discharged from the other end of kiln, which is cooled. The gases emitted from the Kiln have high calorific value containing Carbon Monoxide, methane and ethane etc. These are used for generating Power and in reheating furnaces of rolling mills. PIG IRON Iron ore of particular grit sizes is used in Blast Furnaces. Thus the Iron Ore mines have lot of fine Iron ore dumps collected at mine heads. In order to utilise fine iron ore dust, scientist are busy in developing processes to utilise fine iron ores and convert them in to pig iron. Pig iron making processes such as Romelt Process has been developed in Russia. In India, National Mineral Development Corporation have put up a Romelt process technology plant in the state of Chattisgarh. The capacity of experimental plant is 0.3 million tonne but work is

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also going on a 1.5 million tonne plant. This pig iron will be of high quality. Austria has also developed a technology called Hishmelt process. After the first product is made at Bailadila by Romelt process its efficiency will be known. In Austria a process by name COREX has been developed. Jindal Vijyanagar in the state of Karnataka have installed the COREX plant. The non-availability of coking coal in this region, the soft iron ore is pelletised and fed in the closed furnace. The Corex by-product gas is used as fuel. The liquid pig iron is taken to BOF to make steel. ELE CTRIC PROCESS OF MAKING STEEL Due to shortage of Steel in the Country, Government of India allowed a number of Electric Arc Furnaces (EAFs) to produce steel in the Secondary Steel Sector by recycling the steel scrap. Since early 70"s to 1985, nearly 150 EAFs were installed with a capacity of over 9 million tonnes in various parts of the country. However, in the meanwhile the Medium Frequency Induction Furnaces technology came into the country in early 80s. Electric Induction Furnaces have been installed in all states in India and India is perhaps the only country in the World using Induction Furnaces on a large scale to manufacture secondary steel. Electric Arc Furnaces of bigger capacities say 150 tonnes/charges have been developed. The recent developments in EAF technology are the increased oxygen consumption, reducing power consumption and tap to tap time and the increased hot metal proportion to reduce power consumption and control Cu content which comes from steel melting scrap to produce higher grades of steel. At present nearly 30% of steel is produced by EAF route in the world. This is because of more and more availability of steel scrap. ELECTRIC ARC FURNACES Electric Arc Furnaces installed in India were of small capacities ranging from 5 tonne to 20 tonne per charge in early seventies. The reason was (a) non availability of big size furnaces (b) to cater the need of shortage of steel for construction industry as the product of Arc furnaces was not under govt. control of prices unlike steel produced by integrated steel plants. (c) Facilities provided by Government such as less excise duty of Arc furnace product. Thus EAFs were installed in J & K, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh, Rajasthan, M .P., Bihar, West Bengal, Orissa, Andhra Pradesh, Tamil Nadu, Karnataka, Maharashtra & Gujarat. There was a slump in 1975 to 77 and to rehabilitate them, the banks reduced interest rates and excise duty was also reduced in 1980. Finding shortage of steel melting scrap in the country, import of steel scrap was allowed at concessional custom duty rate. From1978 to 1985 EAF s did very well. Some of them started diversifying the product-mix made by them, some installed balancing equipment and continuos casting equipment. In mid eighties the profitability of EAFs upto 15 tonne/charge decreased particularly who were producing pencil ingots only. Some of EAFs did not take action to reduce power consumption etc. When the Induction Furnaces started producing steel from 84-85 period using less power, the competitiveness of EAFs became less and less despite steel Ministry not giving license to Induction Furnaces to make steel. However,

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EAFs were still favored by Steel Ministry in giving imported steel melting scrap, which was canalised by Government of India and allotted to EAFs only. But Induction Furnaces got import duty concession for importing steel melting scrap through MSTC Ltd. This made the production of EAFs for making only pencil ingots uneconomical. Only 35 EAFs are in operation at present who diversified their production or have started flat production colour coating or galvanising them. INDUCTION MELTING FURNACES Induction melting furnaces in India were first installed to make stainless steel from imported SS Scrap. But in years 81-82 some entrepreneurs, who were having small size induction furnaces making stainless steel, experimented in making mild steel from steel melting scrap, they succeeded. More firms in northern India produced steel (Pencil Ingots) by using 500 kg to 1 tonne induction furnaces. The power consumption was found to be about 700 kWh/tonne, which was nearly 100 units less than EAFs. Bigger size Induction furnaces were then installed first in North India and then in other states of India. By 1985-86, the technology of making mild steel by Induction Furnace route was mastered by Indian Technicians. Induction furnace manufacturers saw the potential and started manufacturing bigger size/capacity furnaces. By 1988-89 period 3 tonne per charge induction furnaces were installed (became standard) all over India. The chemistry of melt was adjusted by adding mill scale, if opening carbon of bath was more. Good quality of steel melting scrap was used. In 1991-92, the Government license and control on steel making and rolling was removed. Then more induction furnaces were installed all over India. Backward and forward integration took place. The use of sponge iron made it possible to adjust chemistry of melt. Thus good quality of Mild Steel pencil ingots are being produced with no tramp elements. INPUTS IN THE INDUCTION FURNACES Induction Furnaces are using Steel melting scrap, Sponge Iron & Pig Iron/Cast Irons. On an average the ratio of these items is 40% sponge Iron + 10% Cast Irons or Pig Iron. The technology of melting these input materials varies according to the availability of raw materials and location of the plant and inputs of sponge iron consumed is as high as 85 % as charge mix on bigger furnaces. TECHNOLOGICAL UPGRADATION The old slogan that in Induction Melting Furnaces you do not make steel but only melt which is like Garbage in and Garbage out has been proved wrong. The ingenuity of making all types of steels has been mastered by technologists of Induction melting Furnaces. Qualified metallurgists and experienced Engineers are employed by the industry. While industry is mostly producing Mild Steel and Carbon Steel, it has been noted that many units have started producing Low Alloy Forging quality steel, thereby, diversifying the product mix. A very careful control is exercised by the smelter in regard to chemistry of melt and quality of product. During the past six years over twenty Induction Melting furnace units have installed Ladle Refining equipment and Continuous Casting machines. There is upgradation

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of electronic circuit design to conserve energy. Some units have installed machinery for proper sizing of steel melting scrap, Electro magnet handling and feed hoppers for its chemical and mechanical treatment to improve density and quality by continuous feeding of charge. This has improved melting rate and productivity using less energy per tonne of metal produced. Power consumption is reported as low as 525 ~ 550 kWh (Units) per tonne. PRESENT SCENARIO After 2 years of depressed market, the steel market has suddenly shown competitiveness. It is noted that induction-melting furnaces in various parts of the country are at present operating to near capacity. However, the power is not supplied to the units fully. Against a capacity of 8.5 million tonnes in the year 2003-04, the induction furnaces are likely to produce nearly 5.2 million tonnes of mild steel ingots. the production of stainless steel may also be 3.5 lakh tonne. There are nearly 890 units of induction melting furnaces installed in various parts of the country and laboratories to produce cast iron, special cast iron, mild steels stainless steels and high & low alloy castings. There are nearly 650 induction furnaces installed in the country to manufacture the mild steel and stainless steel. Out of this nearly 560 induction furnace units are in operation at present. The demand of steel has increased during the last one year, Mini Integrated steel plants have come up in some states of India. These plants, according to our information have been installed at Durgapur zone in West Bengal, Chhattishgarh, Jharkhand, and in a big way in Orissa. It is also noted that many units are installing furnaces of 16 tonne per charge to 22 tonne per charge. Induction melting furnaces use over 60% sponge, and have also installed mechanical devises to remove slag, then use LRF to make better quality steel. The refined steel will be poured in the concast machine to produce steel billets. It is expected that this system of manufacturing steel by these Mini Integrated Steel Plants with capacity from 0.25 to 0.50 Mil Tonne per annum will shortly present a totally new scenario. Very shortly MBF Mini Blast furnace is also going to be added to plants located near mines. These plants are generating their own power for captive consumption from the waste gas of sponge iron kiln. Revolution is taking place to make steel in India by utilising various technologies. India is therefore, emerging as a country with innovative idea to make steel, which is not followed by other countries in the world. In the first decade of twenty first century, major existing integrated steel plants will face a challenge in producing Long products from Induction Furnaces in producing steel economically and efficiently. Features of Indian Iron & Steel Industry: Distribution of iron and steel As a part of the economic liberalization process, the Government of India, on 16 January 1992 abolished the price regulation of the Joint Plant Committee (JPC) on iron and steel, which had been in existence since 1964. However, the requirements

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of Defence, Railways, Small Scale Industries Sector, exporters of engineering goods and the North eastern Region continue to be met on priority at prices that are announced by the producers from time to time. The Development Commissioner for Iron and Steel continues to make allocations of pig iron to the designated consumers and the main producers supply the material on the basis of such allocation. To meet the requirements of steel of Small Scale Industries, allocations are made by the Development Commissioner for Iron and Steel. This is in addition to the purchases made by Small Scale Units, which draw their material directly from the main producers. The Development Commissioner also continues to issue Release Orders for supplies to exporters of engineering goods and make annual supply plans for North Eastern Region. The requirements of Defence and Railways are met by the main producers directly on priority in accordance with the past procedures. Considering the special problems in meeting the requirements of consumers in the North Eastern Regions, special efforts are made to ensure adequate and timely supplies of that region. Pricing of iron and steel The pricing mechanism of the Joint Plant Committee (JPC) operating from 1964 was abolished with effect from 16 January 1992. Producers are now free to determine and announce their prices, which are now governed by market forces of demand and supply. After deregulation, the main producers, i.e. Sail, RINL and Tisco are charging either the actual freight upto stockyard or freight element as it existed prior to deregulation, whichever is lower. This has ensured that far flung areas and distant states are protected by stipulating that the main producers shall charge either actual freight or freight element existing prior to withdrawal of the scheme, whichever is less.

Import and Export of iron and steel Policy framework The general policy and procedures for export and import of iron and steel, ferro alloys and ferro scrap are at present decided by the Ministry of Commerce in consultation with Ministry of Steel. With the liberalization of India's trade policy and commencement of export-import policy for 5 years (from 1-4-1997 to 31-3-2002), the policy for import and export of iron and steel materials has undergone sweeping changes. Import of all items of steel is freely allowed.

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Exports of all items of iron and steel are also freely allowed. Exports of high-grade iron are also freely allowed. Exports of high grade iron ore, chrome ore and manganese ore are made through designated canalizing agencies subject to the ceilings imposed by the Government, in order to conserve high grade ores for domestic consumption and production of value added materials. Consistent efforts are being made by the Ministry of Steel / Development Commissioner for Iron & Steel to ensure adequate supplies of domestic raw materials to meet requirements of engineering exporters.

Current Statistics:Raw steel production In the week ending January 22, 2005, domestic raw steel production was 2,041,000 net tonnes while the capability utilization rate was 92.3 percent. Production was 1,941,000 tonnes in the week ending January 22, 2004, while the capability utilization then was 87.0 percent. The current week production represents a 5.2 per cent increase from the same period in the previous year. The week ending January 22, 2005 represented a 2.5 per cent decrease from the previous week ending January 15, 2005, when production was 2,094,000 tonnes and the rate of capability utilization was 94.7 per cent. Adjusted year-to-date production through January 22, 2005 was 6,477,000 net tonnes, at a capability utilization rate of 91.0 per cent. That is an increase of 6.2 per cent from the 6,100,000 tonnes during the same period last year, when the capability utilization rate was 87.0 per cent. The steel industry in general is on the upswing due to strong growth in demand propelled particularly by the demand for steel in China. India is the ninth largest crude steel producing country in the world. India is the largest producer of Sponge Iron in the world with production of 8.00 million tonnes in 2003-04. Finished steel production at 36.15 million tonnes (Prov.) was up 7.4% over the production in the previous year i.e. 2002-03. Export of finished steel is provisionally estimated to be 5.3 million tones which was higher by 17.6% as compared to the export during the previous year. Apparent consumption of finished steel has been provisionally estimated to be 30.4 million tonnes. This is 5.2% higher than the apparent consumption in the previous year. The private sector continued to play a dominant role in augmenting steel availability in the country. Their contribution in finished steel production increased to about 68% in 2003-04 as compared to 45% in 1992-93. Presently, there are 35

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Electric Arc Furnace (EAF) based steel plants working in the country with an aggregate capacity of 6.72 million tonnes per annum. Several other units are reportedly closed. Various reasons such as rising cost of inputs, increasing tariffs, shortage of power, resource crunch etc. are believed to be responsible for this state of affairs in the EAF industry. Production of Ingots/Concast Billets by EAF Units, which were reporting their production to the office of the Development Commissioner for Iron & Steel, during 2003-04 was estimated at 5.70 million tonnes as compared to 5.19 million tonnes during 20022003. Ship breaking is an eco-friendly activity and is now known as the Ship recycling industry. The most positive aspect of this industry is that more than 90% of its output is recycled. About 2 to 2.5 million tonnes of steel produced through such recycling of ships saves about 6.5 million tonnes of natural resources like iron ore, coal etc. for production of equivalent quantity of steel through integrated steel plants and restores ecological balance to that extent. In addition to being highly labour intensive, it also saves substantial electric power, which is in short supply in the country.

Production regarding various segments of private sector industry: Electric Arc Furnace based steel plants production: (in 000 Tonnes)

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Hot Rolled long products units production:

(in 000 Tonnes)

Hot Rolled Steel Sheets/Strips/Plates units production:

(in 000 Tonnes)

Finished carbon steel Today, India is the tenth largest steel producing country in the world. This sector represents around Rs 90,000 crores of capital and directly provides employment to over 5 lakh of people. The Indian steel sector was the first core sector to be completely freed from the licensing regime and the pricing and distribution controls. 16

This was done primarily because of the inherent strengths and capabilities demonstrated by the Indian iron and steel industry. During 1996-97, finished steel production shot up to a record 22.72 million tonnes with a growth rate of 6.2 per cent while the finished steel production increased in 1997-98 & 1998-99 was only 2.8 per cent and 1.9 per cent respectively as compared to the 20 per cent in 199596 and 6.2 per cent in 1996-97. The growth rate in 1999-2000 has, however, improved and stands at 12.1 per cent. The production of finished steel during April-September has been 14.65 million tonnes. This fall in the growth rate of steel production has been brought about by several factors which inter-alia include, general slowdown in the industrial production and construction activities in the country coupled with lack of growth in major steel consuming sectors. The Economic reforms and the consequent liberalization of the iron and steel sector which started in the early 1990's, brought about a sea of change in the industry, particularly in the field of setting up of new/greenfield steel plants in the private sector. All India Financial Institutions cleared 19 projects involving an annual capacity of about 13 million tonnes of saleable steel at an investment of Rs 13,000 crores. Out of these, 8 projects have already been commissioned with an annual capacity of 4.2 million tonnes. Four more projects have been partially commissioned and are in trial production. Other projects are at various stages of implementation. Thus it will be seen that in the years to come, the percentage production of the private sector will be much larger than production of public sector in the steel industry. Pig Iron Pig Iron is one of the basic raw materials required by the foundry and casting industry for manufacture of various types of castings for the engineering sector. M/s. Usha Martin Industries Limited, M/s. Jindal Steel & Power Ltd. and M/s. Ispat Industries Ltd. have integrated the Mini Blast Furnace (MBF) and are using the hot metal in the charge mix directly for manufacture of steel through Electric Arc Furnace. M/s. Hospet Steel, a Joint Venture of Kalyani and Mukand and M/s. Southern Iron and Steel Company Limited have integrated their MBF with Energy Optimizing Furnace for manufacture of steel. The excess hot metal produced by them supplements the pig iron production. Besides MBF, a COREX Plant (alternative to conventional MBF/BF) along with down stream steel making through Basic Oxygen Furnace (BOF) which has been commissioned in Karnataka by Jindal Vijaynagar Steel Limited, also supplements the production of pig iron.Along with the production of steel, the production of pig iron in the country during the period 1991-92 to the present has also increased. The current production for year is 5.22 million tones. Sponge Iron

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India is the worlds largest producer of Sponge Iron. The growth of sponge iron especially during the last 5/6 years in terms of capacity and production has been substantial. The installed capacity of sponge iron increased from 1.52 million tones per annum in 1990 1991 to 8.75 million tonnes per annum in 2002 2003. The production has increased from 0.9 million tonnes in 1990-1991 to 8.085 million tonnes in 2003-2004. As on 31.12.2003, there were 54 sponge iron units installed in the country having a capacity of 8.75 million tonnes per annum. Out of this, there were 51 Coal Based Units with a capacity of 4.45 million tonnes per annum. One coal based unit with a capacity of 30 thousand tonnes per annum is lying closed. There are 3 gas based units with a total capacity of 4.3 million tonnes per annum. For the year 2003-04 production was 8085.0 tonnes. During the early 90's, sponge iron industry has been specially promoted so as to provide an alternative to steel melting scrap which was increasingly becoming scarce. Today, India is the second largest producer of sponge iron in the world. The production of sponge iron in the country has also resulted in providing an alternative feed material to steel melting scrap which was hitherto imported in large quantities by the Electric Arc Furnace Unit and the Induction Furnace Unit. This has resulted in considerable saving in foreign exchange. Distribution of iron & steel items to SSI Sector: Government has a scheme for routing the allocation of Iron and Steel materials from main producers like SAIL, RINL, IISCO and TISCO to SSI units, and other Government department ( up to 30% of the total allocation) through the State Small Scale Industries Corporations (SSICs) and also through National Small Industries Corporation (NSIC) where SSICs are either defunct or not in existence. In order to ensure that small scale industries obtain these raw materials at reasonable prices, the Govt. gives an average subsidy of Rs.500/- per tonne (as handling charges) to the Corporations so that the corporations supply the steel material at the doorstep of the SSI units. Allocation of Iron & Steel items made during the last three years is as follows:Corporations 2002-2003 SSICs/NSIC 435 NSIC (quantity 2003-2004 540 (24.1%) in 000 MTs) 2004-2005 861 (59.4%) 428

Current global scenario:World Steel Statistics Monthly: Total crude steel production for the 61 countries reporting to the IISI in January 18

2005 was estimated to be 89.8 million tonnes, a rise of 8.5% on January 2004. All regions except South America and Oceania showed an increase.

Global Steel Production:Chinas Steel Production: Chinas record steel imports in 2003 of 43 million tonnes started to decline from May 2004 and, by the end of 2004 had plummeted to 33 million tonnes, a fall of 30% on 2003. While Chinese imports have been declining, Chinese exports have been surging and have climbed every month since February 2004 to reach a new high in December of 3.7 million tonnes. Exports for the year 2004 were 20.1 million tonnes compared to 8.2 million tonnes in 2003. Indeed, since September 2004, exports have exceeded imports to turn China into a net steel exporter. However, taking the year as a whole, China remains a net steel importer by 13 million tonnes. Chinese crude steel production in 2004 was 272 million tonnes, up 23% on 2003. Chinese steelmaking activity continues to stimulate world trade in raw materials. Iron ore imports in 2004 were 208 million tonnes, up 40% on 2003's 148 million tonnes. Scrap imports into China are also surging with imports this year reaching 10.2 million tonnes, up 10% on 2003. USs Steel Production: US steel imports rose sharply in 2004 to 32.8 million metric tonnes, an increase of 51% on 2003. However, after reaching a peak of 3.4 million tonnes in September, imports have subsequently fallen in each successive month to reach 2.7 million tonnes in December. Nevertheless, 2004 has seen a significant surge in imports including a jump in the imports of semis (4.3 to 6.6 million tonnes), flat products (6.9 to 12.1 million tonnes) and long products (5.8 to 8.1 million tonnes). Imports rose significantly from the EU25 (3.9 to 5.5 million tonnes), Mexico (3.0 to 3.9 million tonnes), Brazil (1.9 to 3.1 million tonnes), Turkey (0.9 to 1.8 million tonnes), Russia (0.5 to 2.2 million tonnes) and China (0.7 to 1.8 million tonnes). There were also significant increases in imports from Taiwan, India and South Korea. While representing a significant increase, 2004's imports of 32.8 million tonnes remains some way below the record import surge of 1998 (38.5 million tonnes) and is the highest annual figure since 2000's 35.2 million tonnes. EUs Steel Production:

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In the first 9 months 2004 EU15 exports (outside the EU) were 25 million tonnes - up 17% on the same period 2003. Meanwhile EU15 imports grew by 3% to reach 22 million tonnes in the first nine months. EU enlargement in May 2004 saw 10 new countries - including Poland, the Czech Republic, Slovakia, Hungary and Slovenia - joining the Community. As a result an extra 15% has been added to the EU's crude steel output. Allowing for enlargement, crude steel production in the EU25 in the first 11 months 2004 was 178 million tonnes, up 5.1% on the same period 2003. World's Largest Iron Ore Producers, early-2005 Capacity mt/yr CVRD Brazil 299.3 Rio Tinto UK 173.0 BHP Billiton Australia 144.1 Privat Intertrading Ukraine 45.8 IUD - Donbass Ukraine 38.4 Anshan I&S Works China 36.8 Anglo American South Africa 32.4 LKAB Sweden 28.9 Mittal Steel Various 27.9 CVG Venezuela 26.9 Cleveland-Cliffs USA 26.5 Total capacity 1403.7 Company Base

World Production Capacity for Iron Ore Products, early-2005 Product BF fines DR fines Sinter fines BF lump DR lump BF pellets DR pellets Capacity m tonnes/yr 3.3 9.8 848.7 199.3 14.8 254.6 73.3

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Net capacity total Pellet feed for sale

1403.7 45.9

World Production Capacity for Other Steel Products Total Production capacity End(millions tonnes) 2002 Coke 442.9 Pig iron 715.8 DR iron 67.0 Crude steel 1109.1 EAF 431.9 BOF 610.6 - OHF 66.7 Hot rolled flat 558.0 products Hot rolled long 520.0 products Total End2003 445.6 726.4 68.6 1137.0 440.9 630.4 65.7 579.3 526.5 Total End-2004 444.7 743.5 69.7 1156.8 451.0 640.3 65.4 587.8 542.7

World's Largest Flat Product Producers, early-2005 Capacity mt/yr Mittal Steel Various 53.5 Arcelor Luxembourg 43.0 Nippon Steel Japan 29.7 JFE Steel Japan 29.6 Pohang I&S Works Korea 25.5 US Steel USA 23.1 Thyssen Krupp Germany 18.0 Stahl Shanghai Baosteel China 17.9 Corus UK 12.7 Riva Italy 11.9 Company Base

World's Largest Long Product Producers, early-2005

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Capacity mt/yr Mittal Steel Various 17.7 Arcelor Luxembourg 14.2 Gerdau Brasil, USA 9.0 Riva Italy 8.7 IUD - Donbass Ukraine 7.2 Celsa Spain, UK 6.3 Nucor USA 5.8 Evrazholding Russia 5.8 JFE Steel Japan 5.5 Shougang Beijing China 4.1 Company Base

Hot Rolled Coil - Prices & Production Costs:1995-2004 Estimates plus Medium Term Forecast Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Price $/tonne 434 335 330 278 242 320 213 264 305 502 541 449 372 392 447 Cost $/tonne 295 291 288 281 262 261 245 246 267 355 355 335 318 299 298

Major Steel Input Costs, 1995-2004

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Iron Scrap Year Ore $/tonne $/tonne 1995 132 26.95 1996 126 28.57 1997 124 28.88 1998 107 29.69 1999 88 26.96 2000 94 27.67 2001 75 28.92 2002 88 28.62 2003 117 31.04 2004 204 42.10

Coking Coke Coal $/tonne $/tonne 77.10 42.45 79.54 46.80 74.76 45.11 69.65 43.02 55.26 36.18 60.26 32.40 66.91 36.87 69.83 40.05 115.62 39.09 257.0 48.69

Thermal Coal $/tonne 35.06 37.39 33.36 30.17 26.52 24.16 28.47 27.67 25.08 37.34

Scrap is heavy melting scrap delivered US Midwest. Iron ore is CVRD sinter fines, fob Brazil for Europe, $/tonne iron. Coke is export price, fob Chinese ports. Coking and thermal coal are export price, fob Australia, $/tonne. 2004 - A year of new records:Crude steel production crossed the one billion tonne threshold for the first time to reach 1,036 million tonnes. Steel mill products exported around the world show an 8 percent gain. Iron ore imports by the world's steelmaking countries growing in 2004 to reach 650 million tonnes compared to 2003's 580 million tonnes thus stretching dry cargo shipping capacity even further. Indeed, in the last 3 years the world has made an extra 200 million tonnes of steel requiring an extra 280 million tonnes of iron ore. With supplies of iron ore remaining tight - and demand from steelmakers remaining high - iron ore prices are set to rise by over 70% in 2005 (see graph opposite).An extra 26 cents per dry metric tonne of iron ore (before shipping costs) - applied on global iron ore trade of 600 million tonnes potentially yields an extra revenue to the mines of around $10 billion a year.Exports of ferrous steel scrap around the world growing in 2004 to reach 85 million tonnes. World steel industry witnessed major ups and downs in the last two decades and especially over the past five years; the pattern of trade has been upset by two important developments. These are the collapse of the Soviet Union and the severe financial crisis in most of South East Asian countries, including Korea and Japan. The Asian crisis and the collapse of USSR have transformed importers of steel into exporters. Till the recent financial crisis, the Asian countries were large importers of steel. In 1996, e.g. eight of the ten largest steel producing nations were in Asia and import by the region in the mid 1990's was around 80-90 million tonnes of 23

finished and semi-finished steel per year which is equivalent to a third of the total steel trade. After the Asian crisis, the region got transformed into a net exporter of steel. Hence, the world steel industry is today being characterized by excess capacity and poor demand. This scenario led to undesirable impact on two fronts, firstly breeding protectionism within the developed countries, and secondly dumping of cheap imports. During this year Indian exports have been subjected to Anti-dumping/CVD investigations in EU, USA & Canada that eroded the export base to some extent. It is in this global context that the Indian steel industry will have to cast its future role. In 2003, more than 960 million metric tonnes of steel was produced worldwide. The list outlined below provides the production statistics for a selection of other materials. Steel: 960 million metric tonnes (2003) In 2003, China produced more than 220 million tons of crude steel making it the first country to exceed 200 million tons of crude steel in a year. In 2002, China consumed 244 million tons of steel. Total vehicle production exceeding 4 million units and car production at 1.8 million units along with significant growth in other industrial sectors are contributing to the increasing steel consumption. With a production of almost 43 million tons in 2003, the Luxembourg based company, Arcelor produce the most steel. Arcelor was created by a merger in February 2002 of Aceralia, based in Spain, Arbed, based in Luxembourg and Usinor, based in France. The company is the world's biggest producer of Flat Carbon Steel and Long Carbon Steel, and is among the leaders in Stainless Steel production. In 2002, Japan exported more than 35.2 million tons of steel, a gain for the sixth consecutive year. By country, exports to South Korea, the largest single user of Japanese steel, totalled 9.20 million tons, a record high volume, with increases in flat-rolled products such as hot-rolled wide strips and plates. By product type, crude steel represented 70.9% of all Japanese steel exports in 2002 with special steel accounting for 14.1%. In 2002, the United States imported more than 30.2 million tons of steel and China imported 29.2 million tons of steel. More than 20% of the world's steel is produced in China and the country consumes more than one fifth of the world's steel production. In 2003 the average cost of steel was between $250 - 350 per ton depending upon the specific product. When Henry Bessemer invented his process the cost was about $30 per ton. It is interesting to note that while steel has undergone about a 10 fold increase in price over 150 years, a loaf of bread has had about a 20 fold increase in the same period and a pint of beer has increased about 25 fold. The progress in technology, improved quality and significantly

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reduced environmental footprint have all contributed to the advancement of steel over the past 150 years. Steel is not a single product. There are currently more than 3,500 different grades of steel with many different properties - physical, chemical, environmental, 75% of which 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 have new steels with higher strength reducing the overall shell weight by 25%. The influence of steel on the economy since the days of Sir Henry Bessemer has been sustained by its intrinsic value such as easy to work and form shapes. It's supreme ability to respond to various treatments to achieve a wide spectrum of mechanical properties such as hardness, tensile strength, balanced combination of ductility and toughness etc. have established its usefulness for large varieties of applications, compared to other metals and materials.

Major Indian Iron & Steel Industries: Steel Authority of India Ltd. (Sail): Steel Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully integrated iron and steel maker, producing both basic and special steels for domestic construction, engineering, power, railway, automotive and defence industries and for sale in export markets. Ranked amongst the top ten public sector companies in India in terms of turnover, SAIL manufactures and sells a broad range of steel products, including hot and cold rolled sheets and coils, galvanised sheets, electrical sheets, structurals, railway products, plates, bars and rods, stainless steel and other alloy steels. SAIL produces iron and steel at four integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials, including the Company's iron ore, limestone and dolomite mines. SAIL's wide range of long and flat steel products are much in demand in the domestic as well as the international market. This vital responsibility is carried out by SAIL's own Central Marketing Organisation (CMO) and the International Trade Division. CMO encompasses a wide network of 38 branch offices and 47 stockyards located in major cities and towns throughout India. With technical and managerial expertise and know-how in steel making gained over four decades, SAIL's Consultancy Division (SAILCON) at New Delhi offers services and consultancy to clients world-wide.

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SAIL has a well-equipped Research and Development Centre for Iron and Steel (RDCIS) at Ranchi which helps to produce quality steel and develop new technologies for the steel industry. Besides, SAIL has its own in-house Centre for Engineering and Technology (CET), Management Training Institute (MTI) and Safety Organisation at Ranchi. Our captive mines are under the control of the Raw Materials Division in Calcutta. The Environment Management Division and Growth Division of SAIL operate from their headquarters in Calcutta. Almost all our plants and major units are ISO Certified. The Government of India owns about 86% of SAIL's equity and retains voting control of the Company. However, SAIL, by virtue of its "Navratna" status, enjoys significant operational and financial autonomy PRODUCTION As part of the plan, SAIL will increase hot metal production from its plants to a level of about 20 million tonnes per annum (MTPA) by 2012 against the current level of 13 MT. Plant-wise break-up of hot metal production is as follows: Integrated Steel Plant Current level (2003-04) Projected level (2011-12) Bhilai Steel Plant (BSP) 4.9 7 Durgapur Steel Plant (DSP) 1.98 3.2 Rourkela Steel Plant (RSP) 1.73 3 Bokaro Steel Plant (BSL) 4.1 6.5 Total 12.71 19.7 Based on the above, crude steel production by SAIL is planned to reach a level of 18.7 MTPA by 2012 from the current level of 11.83 MT (achieved in 2003-04), leading to saleable steel production of 17.38 MTPA against the current level of 10.73 MT. In view of emerging market requirements, SAIL has also planned to raise its output of finished steel to 16.6 MTPA by 2011-12 from the current level of 8.6 MT, and reduce generation of semi-finished steel from 20% of saleable steel to 4%. This will enable inclusion of more value-added products in the companys product basket. Production (in Million tonnes) Year ending March 31 2002 2003 Iron Ore Limestone Dolomite 11.177 0.829 0.129 11.827 0.909 0.216 2004 12.784 1.133 0.288

Products: Semis: Blooms, Billets & Slabs Long product: Structurals Crane Rails Bars, Rods & Rebars Wire Rods

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Flat product: Sheets & Skelp Plates, CR Coils & Sheets, GC Sheets\ GP Sheets and Coils Tinplates Electrical Steel Tabular product: Pipes Railway product: Rails Wheels, Axles, Wheel Sets

Private Sector Companies: Introduction The Private Sector continued to play a dominant role in augmenting steel availability in the country. Their contribution in finished steel production increased to about 68% in 2003-04 as compared to 45% in 1992-93. Similarly, the private sector is also playing a significant role in the production of pig iron and sponge iron. Production of pig iron in the secondary steel sector was about 81% of the total production in the country. In the area of sponge iron the industry continued to the largest producer in the world. During pre-liberalization phase, there was only one integrated steel plant in the private sector in the country i.e. Tata Iron & Steel Co. Ltd, which is in existence since 1907. In addition, there was a large number of mini steel plants (electric arc furnace units) and steel processing units (i.e. stand alone Hot/Cold rolling mills, galvanising and colour coating units etc.), a few sponge iron units and one pig iron unit. In the post-liberalization phase, the scenario changed with the setting up of several new/green field iron/steel plants. This was associated with structural changes in the sector. While steel plants based on world class capacity and state-ofthe-art technologies (viz. Corex technology for iron making, twin shell electric arc furnace and thin slab casting compact strip mill, energy optimising furnaces) were commissioned, inefficient and un-competitive units continued to close down. The performance of the five major private sector producers as well as the general performance of various sectors of the industry i.e. EAF Industry, Sponge Iron Industry, Pig Iron Industry etc. are given below: Tata Iron and Steel Company Limited (TISCO) TISCO has an intergrated Steel Plant, with an annual crude steel making capacity of 4.0 Million Tonnes, located at Jamshedpur, Jharkhand. The Steel Works is situated at Jamshedpur in the State of Jharkhand, India. The factory covers 800 hectares of land. West Bokaro Division in Hazaribagh District covers 2000 hectares land in which mining and coal beneficiation activities are performed. Jharia Division occupies 2500 hectares of land for its industrial, mining and domestic activities in the District of Dhanbad both in the State of Jharkhand. The Iron Ore and Dolomite Mines are located at Noamundi in the State of Jharkhand and at Joda, Katamati, Khodbond and Gomardih in the State of Orissa. Over the years, Tata Steel has emerged as a thriving, nimble, steel enterprise, due to its ability to transform itself rapidly to meet the challenges of a highly competitive global economy and commitment to become a supplier of choice. Constant modernisation and

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introduction of state-of-the-art technology at Tata Steel has enabled it to stay ahead in the industry. Tata Steel's four-phase Modernisation Programme in the steel works has enabled it to acquire the most modern steel making facilities in the world. Recently, Tata Steel commissioned its 1.2 million tonne capacity Cold Rolling Mill complex at 'Global Speed and Cost'. Its fifth phase of the Modernisation Programme leveraged the intellectual capabilities of its employees to generate sustainable value for the stakeholders. Most recently, it has embarked on a programme for expansion of its existing steel making capacity by 1million tonne to reach a rated capacity of 5 million tonnes per annum. Tata Steel has continuously been on the growth path and is constantly striving to improve the EVA of the company by seizing the opportunities of tomorrow and by exploring newer avenues of operations such as a ferro-chrome and titanium. Tata Steel, after completion of their four phases of modernization has achieved a production of 3.54 million tonnes of finished steel and 4.22 million tones of crude steel in 2003 2004, surpassing all previous records. The performance of TISCO was marked by higher volumes, richer product mix and considerable achievement in the areas of cost reduction and improvement. Jindal Organisation: $ 2 billion Jindal Organisation has expanded and diversified into core business areas ensuring synergy amongst its various business ventures, spreading over 13 plants at 10 pivotal locations in India and two plants in USA. Group Jindal Jindal Jindal Jindal Companies: stainless limited iron and steel company limited vijayanagar steel limited Jindal steel and power limited united steel corporation

Jindal stainless limited: India's largest integrated manufacturer of Stainless Steel catering to about 40% of Indian demand. Plant Location - Hisar, Harayana Capacity - 500,000 tpa High Carbon Ferro Chrome plant at Vishakhapatnam, Andhra Pradesh Jindal iron and steel company limited: India's largest integrated galvanising facilities in private sector accounting for 25% of total galvanising production in the country. Engaged in Hot Rolling, Cold Rolling and Galvanising business. Export of 75% of production to over 45 countries. Plant Locations - Vasind and Tarapur, Maharashtra Capacity - HR 280,000 tpa, CR 900,000 tpa, GP/GC 850,000 tpa

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Jindal vijayanagar steel limited: An environment friendly integrated steel plant manufacturing HR coils using the revolutionary Corex technology for iron making. Supplies HR coils to group company JISCO for value addition and to South India. Only HR coil manufacturer in South India. Tie up with world steel leaders gives unique advantage in manufacturing and technology. Plant Location - Toranagallu, Karnataka Capacity - 2.0 million tpa Jindal vijayanagar steel limited (JVSL) is a greenfield integrated steel plant based on most modern and environment friendly COREX ironmaking technology located at Toranagallu, Bellary, Karnataka, India. Its present capacity is 1.6mtpa HR coils which is being expanded to 2.5mpa by 2004 and 4mtpa by year 2007.JVSL is supported by worlds largest Oxygen Plant, Jindal Praxair Oxygen Company (JPOCL) of capacity 5000 tpd and a Thermal Power Plant (JTPCL) producing 260 MW using Corex gas. JTPCL capacity is planned to be increased to 1000 MW. JVSL is located in the heart of rich iron ore Bellary Hospet belt and has a 3 mtpa Pellet Plant whose capacity is being increased to 4.2 mtpa by 2004 and to 8.0 mtpa by 2007. JVSL Pellet Plant has achieved benchmark performance in a short span of 2 years of its operation in terms of productivity, quality and cost. JVSL is organizing International Iron ore Pelletisation Technology Know-How Exchange Meet to share best practices covering raw material preparation, balling, induration, process control, automation, maintenance practices, environment management, mathematical modelling, operational experiences and recent advances in all spheres of related activities. JVSL is the only flat steel producers in south India, and the first integrated steel plant to use oxygen based iron and steel making with continuous casting and hot rolling. Products: Mild steel hot rolled coils Mild steel hot rolled plates & sheets Jindal steel and power limited: Asia's largest and world's second largest coal based sponge iron plant. Also manufacturing Rails, Blooms and Power Plant Location - Raigarh, Madhya Pradesh Capacity - 650,000 tpa, Steel - 400,000 tpa, Power - 150 MW 150 MW Power plant also at Raigarh. Iron ore mining in Orissa and coal mining in Madhya Pradesh ensure quality raw material at a lower cost. JSPL is one of the lowest-cost producers of sponge iron in India. Backward integration has given JSPL the distinction of being the only sponge iron manufacturer with its own captive raw material resources and power generation. This has enabled JSPL to monitor both price and quality of its products. At Raigarh, JSPL has the world's largest coal-based sponge iron manufacturing facility, with an installed capacity of 6,50,000 TPA, using six rotary kilns. Growth and expansion plans include an additional 1.3 million TPA capacity of sponge iron

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with the commissioning of 4 rotary kilns and a 250,000 MT capacity for metallics charge using the state-of-the-art rotary hearth furnace. Plans have also been developed to establish a 3 million capacity steel plant in the state of Orissa. Sponge iron was the first production facility at the Raigarh plant, commissioned in 1991. In India, JSPL is the market leader in coal-based sponge iron, enjoying a market share of 22%. Today a major portion of our production is used for in-house manufacture of steel at JSPL and the other companies in the Jindal Organisation. As a key raw material for the manufacture of steel, our focus on sponge iron continues. The increased production is geared to meet our expanding capacities for value-added steel products in the years ahead. Steel at our Raigarh plant is being manufactured using the Electric Arc Furnace. The steel melt shop (SMS) is equipped with ladle furnace and vacuum degassing and has continuous casting facilities for wide slabs, rounds and blooms. The capacity of SMS at present is 4,00,000 TPA.A further increase in the steelmanufacturing capacity is on the anvil with a new SMS near the Rail Mill in the pipeline. Growth is the keyword and by March 2005, our steel production will exceed 1.65 million TPA, offering a range of steel products. JSPL has entered into a technical collaboration with NKK Corporation, Japan for technology transfer to produce superior quality, world's longest rails of 120mfinished length, along with Parallel Flange Beams, Columns and Sheet Piles for the first time in the country. The agreement covers 'know-how' transfer encompassing steel-making, secondary refining and continuous casting up to rolling and finishing of long rails and universal beams; deputation of NKK multi-disciplinary specialists at the JSPL plant; and training of JSPL personnel at NKK steelworks in Japan. This technical collaboration shall enable production of long rails requiring far less joints in tracks, ushering a new era in safer rail-travel and making introduction of fast trains in India a reality. Product Range Carbon & Alloy Steels confirming to National & International Standards like SAE, AISI, DIN,IS and ASTM Jindal united steel corporation: Manufactures steel plates for use in large diameter pipes, construction and fabrication industries. Plant Location - Bay Town, Texas, USA Capacity - 1.2 million tpa Essar Steel: Overview Essar is an integrated steel producer, with operations all along the value chain. Essar Steel produces some of the world's best steel at its state-of-the-art steel complex in Hazira, Gujarat. It is also India's largest exporter of flat products,

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sending half of its production abroad, mainly to the highly demanding markets of the West, and the growth markets of South East Asia and the Middle East. Essar ensures excellent customer service through a modern distribution network. Plant Essar Steel's core manufacturing facilities are located at its steel complex in Hazira, Gujarat. The Hazira complex includes a 2 MTPA hot briquetted iron (HBI) plant, a 2.4 MTPA hot rolled coils (HRC) plant and a downstream complex. These facilities are complemented by its joint ventures: a 3.3 MTPA pellet plant in Vishakapatnam and a 200,000 TPA cold-rolled coils plant in Indonesia. Hot Briquetted Iron Plant Essar Steel operates the world's largest gas-based hot briquetted iron (HBI) plant with a production capacity of 3.4 MTPA. The plant uses state-of-the-art technology, which ensures high quality raw material for the steel plant. Essar Steel is one of the world's lowest cost producers of HBI on a per tonne basis. The plant is supported by a captive power plant of 32MW, which operates at 100% capacity. Products All Essar Steel's products are worldclass, meeting the highest international standards, supported by excellent marketing and service: Iron Ore pellets Hot briquetted (sponge) iron (HBI) Hot rolled coils (HRC) Cold rolled coils (CRC) Plates Sheet Essar Steel defines value as value to customers because when its customers prosper, the company prospers. Delighting its customers drives its unique approach to marketing. First, to help its customers choose the best steel every time, it became the first Indian company to brand flat products, under the name "24-carat steel". When customers ask for 24 carat steel, they are assured of the world's best steel, backed by the strength and promise of Essar Steel's technology, quality and distribution. Ispat Industries Limited (IIL) : Ispat Industries Ltd. (IIL) has set up a 3 million tones per annum of hot rolled steel coil plant at Dolvi in Raigad District, Maharashtra. The Dolvi complex also has a modern blast furnace (setup by a group company Ispat Metallics India Limited) capable of producing 2.0 million tones per annum of Hot Metal / Pig Iron and a DRI plant with a capacity of 1.2 million tones per annum. It is ISO 9002 and ISO 14001 certified. Further, the complex envisages adding 110 MW captive power plant (which will use the BF gas) by the year 2005.

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The steel plant is using the electric arc furnace route (CONARC process) for producing steel. In this project, IIL have uniquely combined the usage of hot metal and DRI (sponge iron) in the electric arc furnace for production of liquid steel. For casting and rolling of liquid steel, IIL have the state-of-the art technology called compact strip production (CSP) process, which is installed for the first time in India and produces high quality and specifically very thin gauges of HRC. IILs products are well accepted in international markets. Technological Improvements in sponge iron plant: Automated Lime coating system for high temperature operation to enhance productivity. Oxygen injection system to increase the Bustle gas temperature to enhance productivity. Process improved to consistently use high % of lump ore in the feed mix to reduce cost of production. Operational Performance: The operational performance of the DRI plant is 10,56,493 mts in 2003-04. The operational performance of the HR Coils plant is 16,19,170 mts in 2003-04.

Worlds Iron & Steel Industry: MITTAL STEEL: Company Profile Mittal Steel is one of the largest steelmakers in the world, with production anticipated to exceed 48 million tons and revenues of over $22 billion in 2004. The product of a merger announced in October 2004 between LNM Holdings and Ispat International, Mittal Steel is the worlds most global steel producer with steelmaking facilities in 14 countries and sales and marketing offices in a further 11. We employ more than 150,000 people spanning 45 different nationalities. Our shares are listed on the New York and Amsterdam stock exchanges. Mittal Steel has set the pace for the consolidation and globalisation of the world steel industry. We have taken on a range of acquisitions, many of them formerly public sector-owned companies, and made successes of them. In the process we have spread best practice and modern production techniques throughout our plants. Our capital investment programme is unmatched in the industry.

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With the proposed acquisition of International Steel Group, Mittal Steel will become the worlds leading steelmaker, with annual production capacities of 70 million tons a year. Our 5000 strong customer base, spanning 120 countries, includes household names in the automotive, engineering and appliance sectors. A force in every segment of the steel market, Mittal Steel produces a broad range of high-quality finished and semi-finished products for the flat and long products markets. Mittal Steel is among the most efficient steel producers in the world. We encompass all aspects of modern steelmaking, combining both integrated and minimill facilities and producing much of the iron ore and coking coal used in our furnaces. We are also among the most advanced steel makers, operating a range of modern technologies. We have pioneered the use of direct reduced iron (DRI) as a raw material source and are now the worlds biggest producer of DRI. With two technical research facilities, our product development teams are ready to meet the needs of the most demanding customers. Mittal Steel, soon to be the world's biggest steel producer, expects a stable market for the metal in 2005 and is looking at further acquisitions. Lakshmi Mittal confirmed he was interested in buying a stake in Turkey's Eregli Demir Celik (Erdemir), which the government plans to sell this year. His group --

which has emerged as a leading consolidator in the steel industry -- was also looking at assets being privatised in Poland and the Czech Republic, Mittal told Reuters on the fringes of the World Economic Forum in Davos. Steel prices have as much as doubled in the past year on booming demand, particularly from China, leading to some fears of a correction. In 2004 he merged his LNM Holdings and Ispat International NV and agreed to buy International Steel Group Inc of the United States. When that deal is completed in the first quarter of this year, Mittal Steel will outstrip current global leader Arcelor in terms of output. Mittal said he expected futher consolidation in the steel sector, with his company playing a leading role. Earlier this month Mittal gained a foothold in the Chinese market through the $314 million purchase of a stake in China's eighth largest player, Hunan Valin Steel Tube & Wire Co Ltd. The acquisition was the first sizeable investment by a non-Chinese steelmaker in an established Chinese steel company. Looking ahead, Mittal is eyeing Turkey and eastern Europe. "We have expressed interest in Erdemir in Turkey, and in Poland and Czech Republic," he said. Other companies reported to be chasing the Erdemir stake include Arcelor and two Russian steelmakers Novolipetsk and Severstal. The Turkish government has appointed a group of advisers to look into the sale of the state's 46.12 per cent

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stake in Erdemir, the country's biggest steelmaker. The sale is part of a privatisation backed by the International Monetary Fund. Technology: Mittal Steel is one of the most technologically advanced steel companies in the world, operating a range of modern steel making technologies. These include DRIEAF, Corex-Midrex-CSP and BF-BOF. Our steel-finishing plants, I/N Tek and I/N Kote (both joint ventures with Nippon Steel), have set new standards for automation, productivity and quality in the production of cold-rolled and galvanised steels. Mittal Steel has two state-of-the-art research and development centres with global responsibility for process and product development. Our Research and Development centre located in Chiacgo, USA, is primarily devoted to research on flat products. Our Centre of Research located in Gandrange, France, is engaged principally on long products research. Over the years, we have developed the most comprehensive portfolio of advanced high strength steels for the automotive industry and innovative products for the appliance and electric motor industries (including advanced high-strength steels, stainless substitute steels and fingerprint-resistant steels).Mittal Steel was among the first steel makers to participate in the customer product design process. We are a leader in process modeling techniques focused on quality improvement, product development and cost reduction.Their global application development team continues to work closely with customers in areas such as crash management systems, weight efficiency, motor design efficiency and global sourcing. their scientists have been awarded worldwide recognition for their work in these fields. Mittal Steel is committed to building strong, long-term relationships with customers through timely product development and effective engineering support. Products: Mittal Steel offers one of the broadest product ranges in the world steel industry: Semi-finished steel Flat products Long products Wire rod Coated steels Tubes and pipes Demand from China caused prices of iron ore for 2005 delivery to rise 71 percent and those of coking coal to more than double, according to prices negotiated by Japanese steel makers, a global benchmark. In 2004, iron ore prices rose 19 percent and coking coal gained 30 percent. The commodities are used to make steel. . The lower costs may help the Rotterdam-based Mittal bolster its position as the most profitable steel maker. Net income in 2004 rose to a record $4.7 billion as it

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raised prices by 54 percent and made acquisitions in Eastern Europe and South Africa. Today, with prices shooting up, companies which have their own mines have an edge over others & Mittal steel is reaping the benefits of this strategy. . Mittal Steel gets 60 percent of its iron ore and 70 percent of its coking coal from its own mines & the company owns mines in South Africa, Kazakhstan, Algeria, Mexico, the United States and Bosnia. The Luxembourg-based Arcelor, its biggest competitor, gets just 3 percent of its iron ore from its own mines and buys all of its coal from outside suppliers. Mittal will overtake Arcelor as the biggest steel maker after buying the Richfield, Ohio-based International Steel Group from the financier Wilbur Ross this month. The company has also invested in steel makers in South Africa, Poland, Czech Republic, Romania and Macedonia since January 2003. . Shares of Mittal Steel, which was formed in December by the merger of Lakshmi Mittal's closely held LNM Holdings and the publicly traded Ispat International, have more than quadrupled in the past year to 30.02. That compares with a 27 percent gain for Arcelor, a 26 percent increase for Nippon Steel and a 17 percent gain for the Tokyo-based JFE Holdings, the fourth-biggest steel maker. . Mittal, who started his company in 1976 after acquiring a steel mill in Indonesia, owns about 97 percent of the company. His family's stake will fall to 88 percent after the $4.5 billion cash-and-stock purchase of International Steel is completed. In addition to mines in Africa, Central Asia, North America and Eastern Europe, Mittal owns steel mills in 14 countries. The company has pursued a strategy of buying money-losing plants and reviving them by investing in new facilities and increasing production. . Mittal Steel is considering acquisitions in China and India to tap rising demand in those nations. The company said in January that it would buy a stake in Hunan Valin Steel Tube & Wire of China for $314 million, its first acquisition in a nation that uses a third of the world's steel. China will consume 340 million tons of steel this year, 9 percent more than last year, according to Japan Iron & Steel Federation. . China's per-capita steel consumption - which rose to 270 kilograms, or 595 pounds, in 2004 from 203 kilograms in 2003 - has room to grow further as the nation catches up with markets like South Korea, where annual steel consumption is 700 kilograms per person. In India, the government forecasts that steel demand will double in the next seven years. Mittal Steel does not own any Indian steel makers or mines. Mittal Steel's annual capacity - which will be 70 million tons after the International Steel acquisition - may rise to 100 million tons in the next several years.

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Pohang Iron & Steel Company. (POSCO): History From a humble beginning in 1968 as a small, government-owned steel company, Posco has flourished over the years to become the worlds leading steel producer. Today, as it celebrates the second anniversary marking its privatization, Posco stands at the pinnacle of the steel industry, poised and ready to surpass the 30 million ton mark in annual production and reach the goal of attaining 36 trillion won in corporate value by the year 2007. Headquartered in the southeastern port city of Pohang, Posco employs approximately 19,200 and generated net earnings of 819 billion won (approximately US$671.3 million) in 2001. Growing from a single plant in the early 1970s, the company now operates two of the worlds premier steel producing facilities, Pohang and Gwangyang Works, and has forged strategic alliances and partnerships with numerous companies in Asia, the Americas and Europe. Posco has become a truly global company with a vision for the future. Yet it is from the past and its reliance on core business principles that the company draws the strength and courage needed to continuously move forward in this everchanging industry, seeking out new niches in the global marketplace. As the worlds most competitive steel company, Posco continues to make new ground in the areas of environmentally friendly production techniques, innovative management practices and investor relations (IR). Today, the companys grand vision extends far beyond steel, as Posco continues to quietly work behind the scenes to enrich the future of humankind through tomorrows high-tech industries. The companys focus on producing the highest quality steel materials for the customers, while maximizing shareholder value, has enabled it to become an extremely efficient, production oriented company. At present, the combined steel output of the two primary steelworks, the Pohang Works (899 hectares) and the Gwangyang Works (1,253 hectares), totals 28 million tons and includes hot rolled coil and plates, cold rolled sheets, plates and wire rods, flat rolled magnetic steel sheets and strips, electrical steel sheets and stainless steel products. Output Posco produces some 26 million tons of steel products each year, enough to produce about 100,000 compact cars a day. Today, the company ships these products to over 60 countries around the globe, satisfying some of the worlds most quality-sensitive manufacturers. Operating a total of five hot strip mills and one mini-mill, Posco produces some 21.24 million tons of hot rolled sheet annually, of which 9.35 million tons is delivered to customers in the form of finished products for use in automobiles, steel structures, steel pipe, home appliances and a variety of other products. A portion of the hot rolled sheet output is further processed into value-added products such as cold rolled products and electrical sheet. Pohang Works The Pohang Works three plate mills produce some 3.11 million tons of plateproducts annually. Commonly used in ships, bridges, and buildings, Posco plate products have played a decisive supporting role in the development of Koreas

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globally competitive shipbuilding industry. In response to increasing demand for high-grade specialty products, the company continues to develop production technology and commercialize plates with applications in welded structures, marine structures, and pressure vessels as well as machinery, pipe, and storage tanks used in extreme low-temperature environments. The three wire rod mills at the Pohang Works produce some 1.92 million tons of standard and specialty steel wire rods annually. The former category includes commercial-grade wire rods used to make screws, nails, barbed wire, and wire mesh as well as high-grade wire rods used for wire rope, springs, welding electrode, and underwater cable. The latter includes wire rods used to make high tensile strength nuts and bolts, piano wire, tire cord, prestressed concrete wire, and components for precision equipment. Booming support for Posco Since commissioning Koreas first cold rolling mill back in 1977 in support of the booming domestic automobile and home appliance industries, Posco has steadily expanded production output to 9.15 million tons annually with two mills at the Pohang Works and four at the Gwangyang Works. Cold rolled products are primarily used in home appliances, automobiles, food containers, and exterior construction materials. Today, the company offers a wide range of high-grade products that can satisfy virtually any customer need. Its systematic efforts to boost demand for steel cans and other value-added products have also significantly increased sales in this product segment. Another source of growth has been increasing orders from Japanese automakers, whose vehicles set the standard for quality in global markets. Advanced production technology Requiring advanced production technology, steel for use in the electric and electronics industries represents another value-added Posco product category. Beginning with an annual capacity of 20,000 tons in 1980, it has continued to expand its electrical steel production facilities at the Pohang Works to reach production of 540,000 tons annually, today. Of this total, 40,000 tons is grainoriented electrical sheet used for power generators and transformers, while the remaining 500,000 tons is non-oriented electrical sheet for electric motors. Capacity expansion Posco, the worlds fourth largest steelmaker, is all set to boost its hot-rolled steel production capacity by 900,000 tons from October to meet rising demand. The company will begin operation of the second mini