Saturday, 14 February 2015

What Is Steel and Steel Sector ?

Steel is an alloy of iron and carbon. It is produced in a two-stage process. First, iron ore is reduced or smelted with coke and limestone in a blast furnace, producing molten iron which is either cast into pig iron or carried to the next stage as molten iron. In the second stage, known as steelmaking, impurities such as sulphur, phosphorus, and excess carbon are removed and alloying elements such as manganese, nickel, chromium and vanadium are added to produce the exact steel required. Steel mills then turn molten steel into blooms, ingots, slabs and sheet through casting, hot rolling and cold rolling.

India became the fourth largest steel-producing nation in the world with production of over 74 million tonnes (MT). However, it has a very low per capita consumption of steel of around 59 kgs as against an average of 215 kgs of the world. This wide gap in relative steel consumption indicates that the potential ahead for India to raise its steel consumption is high.

Being a core sector, steel industry tracks the overall economic growth in the long term. Also, steel demand, being derived from other sectors like automobiles, consumer durables and infrastructure, its fortune is dependent on the growth of these user industries.
The Indian steel sector enjoys advantages of domestic availability of raw materials and cheap labour. Iron ore is also available in abundant quantities. This provides major cost advantage to the domestic steel industry, with companies like Tata Steel being one of the lowest cost producers in the world.

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