SUMMER INTERNSHIP PROJECT REPORT ON

“INTERNATIONAL AND DOMESTIC TRADING OF STEEL”

submitted in the partial fulfillment of

TWO YEARS MBA CURRICULUM
Report submitted to :-

METALS AND MINERALS TRADING CORPORATIONS LIMITED,

LODHI ROAD,SCOPE COMPLEX,NEW DELHI-110003

Report submitted by :- Under the guidance of:-

PAWAN KUMAR MR. S. C. CHATURVEDI

MBA(2ND SEMESTER) DGM(steedivision),MMTC Ltd
UNIVERSITY BUSINESS SCHOOL
PANJAB UNIVERSITY REGIONAL CENTER
LUDHIANA
 ACKNOWLEDGEMENT

I feel proud and pleased to express my gratitude to everyone who has contributed
to the successful completion of this project.

I express my deep gratitude to MMTC Ltd, for giving me the opportunity to carry
out a project which enabled me to gain knowledge and learning that would be an
invaluable asset for ever.

I thank my guide Mr.S.C. Chaturvedi,DGM steel Division, MMTC, for his able
guidance and constructive support.

I would also like to thank Mr.S. Bhaskar DGM TRG,for giving me the opportunity
to learn in the organization.

I would like to thank all the people who were directly or indirectly involved in
making this project a success.

PAWAN KUMAR
 CONTENTS
CHAPTER TITLE PAGE NO
1 INTRODUCTION OF MMTC 1-9
CORPORATE MISSION,OBJECTIVE 2
CORPORATE PROFILE 3-6
RECENT ACTIVITIES OF MMTC 7-9

2 GLOSSARY OF TERMS 10-22

3 PRODUCT ANALYSIS 23-57

STEEL, PIG IRON 24
HOT ROLLED,COLD ROLLED 24-43
PRODUCTS
ELECTRICAL STEEL 44-57
4 PRODUCTION OF STEEL 58-76
WORLD STEEL PRODUCTION 59-67
STEEL PRODUCTION IN INDIA 68-76
5 PRICE ANALYSIS 77-82
WORLD STEEL PRICES 78-81
INDIAN STEEL PRICES 82
6 TRADING OF STEEL 83-119
CONSUMPTION AND DEMAND 83-87
DEMAND SUPPLY SCENARIO 88-90
DUTY STRUCTURE 90-91
IMPORT EXPORT OF STEEL 91-96
TRADING PROCEDURE OF STEEL 97-119

BIBLIOGRAPHY
INTRODUCTION
OF
MMTC LIMITED

Page | 1
CORPORATE
MISSION
As the largest trading
company of India and a major
trading company of Asia,
MMTC aims at improving its
position further by achieving
sustainable and viable growth
rate through excellence in all
its activities, generating
optimum profits through total
satisfaction of shareholders.
Customers, suppliers,
employees and society.
CORPORATE
OBJECTIVES
 To be a leading International
trading House in India
operating in the competitive
global trading environment,
with focus on bulk as core
competency and to improve
returns on capital employed.
 To retain the position of single
largest trader in the country for
product lines like minerals,
metals and precious metals.
To render high quality of
service to all categories of
customers with professionalism
and efficiency.
 To provide support services to
the medium and small scale
sectors.
 To streamline system within the
Company for settlement of
commercial disputes.
 To promote development of
Trade related infrastructure.
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CORPORATE PROFILE

INDIA'S LARGEST TRADING GIANT

 Established in 1963, MMTC, one of the two highest foreign exchange earner for india, is
a leading international trading company with a turnover of over US$ 5 billion.

 It is the largest international trading company of India and the first Public Sector
Enterprise to be accorded the status of "FIVE STAR EXPORT HOUSE" by Govt Of
India for long standing contribution to exports.
 MMTC is the largest non-oil importer in India.
 MMTC's diverse trade activities encompass Third Country Trade, Joint Ventures, Link
Deals - all modern day tools of international trading.
 Its vast international trade network, which includes a wholly owned international
subsidiary in Singapore, spans almost in all countries in Asia, Europe, Africa, Oceania
and Americas, giving MMTC a global market coverage.
INDIA'S LEADING EXPORTER OF MINERALS

 MMTC is major global player in the minerals trade and is the single largest exporter of
minerals from India. With its comprehensive infrastructural expertise to handle minerals,
the company provides full logistic support from procurement, quality control to
guaranteed timely deliveries of minerals from different ports, through a wide network of
regional and port offices in India, as well as international subsidiary.
 MMTC has won the top export award from Chemicals and Allied Products Export
Promotion Council (CAPEXIL) as the largest exporter of minerals from India for the
seventeenth year in a row.
ONE OF THE WORLD'S LARGEST BUYER OF FERTILIZERS
 As a leading player in fertilizers and fertilizer raw material, MMTC has become a major
fertilizer marketing company in India, through planned forward integration of its import
activities with the direct marketing of Urea, DAP, MOP, Sulphur, Rock Phosphate, SSP
and other farming and agricultural inputs.
THE SINGLE LARGEST BULLION TRADER IN THE INDIAN SUBCONTINENT

 MMTC is the largest importer of gold and silver in the Indian sub continent, handling
about 100 MT of gold and 500 MT of silver annually. MMTC has opened a retail
jewellery showroom at Maker Bhawan in Mumbai. MMTC supplies branded hallmarked
gold and studded jewellery. MMTC has also opened a DUTY FREE jewellery store in
the Departure Lounge at Sahar International Airport, Mumbai, India. An assay and
hallmarking unit has been set up at New Delhi for testing the purity of gold and gold
articles in accordance with the internationally accepted fire assay method.

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  Besides organizing major jewellery exhibitions abroad, exclusively, MMTC is keen to set
up manufacturing & joint ventures for modern jewellery in association with leading
names in the international jewellery trade as well as marketing.

 MMTC's retailing network extends from a jewellery showroom at Maker Bhawan, 4 duty
free shops at Mumbai (2), Chennai (1), Thiruvananthapuram (1), International airports
and sales counter at its Jhandewalan office in New Delhi.

THE BIGGEST IMPORTER OF NON FERROUS METALS & INDUSTRIAL RAW

MATERIAL TO INDIA

 MMTC is India's largest seller of imported non-ferrous metals viz. copper, aluminium,
zinc, lead, tin and nickel. It also sells imported minor metals like magnesium, antimony,
silicon and mercury, as also industrial raw materials like asbestos and also steel and its
products. MMTC imports quality products conforming to international specifications like
ASTM or BSS or LME approved brands.
 Major institutional customers of MMTC in India are accredited with ISO-9002 status.
MMTC sources its metals from empanelled suppliers including producers and traders
throughout the world.
 MMTC is a proud winner of gold trophy for exports of Engineering and Metallurgial
product in non-SSI Sector and also awarded the All India Trophy for highest export in the
category of prime metal by EEPC.

GROWING INTEREST IN AGRO PRODUCTS WORLDWIDE

 MMTC is amongst the leading Indian exporters and importers of agro products. The
company's bulk exports include commodities such as rice, wheat, wheat flour, soyameal,
pulses, sugar, processed foods and plantation products like tea, coffee, jute etc.

 MMTC also undertakes extensive operations in oilseed extraction, from the procurement
of seeds to the production of de-oiled cakes for export, as well as the production of edible
oil for domestic consumption. It also imports edible oils. MMTC has won the gold trophy
from FIEO for highest exports in agritulcture & plantation product in non-SSI Sector.

GENERAL TRADING

 MMTC also handles items like textiles, Mulberry raw silk, building materials, marine
products, chemicals, drugs and pharmaceuticals, processed foods, hydro carbons, coal
and coke.

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  Its comprehensive infrastructure for bulk cargo handling, with well developed
arrangements for rail and road transportation, warehousing, port and shipping, operations,
gives MMTC complete control over trade logistics, both for exports and imports.
 The company's countrywide domestic network is spread over 75 regional, sub-regional,
port and field offices, warehouses and procurement centres.
 MMTC's progress in the recent past has taken it from monopoly status to a competitive
open market player making a strong thrust towards broad basing its sphere of activities,
while consolidating its core areas of business.
 To create synergy between its manufacturing, trading and technology partners and to
bring optimum efficiency and expertise to its operations worldwide, MMTC has
promoted along with government of Orissa, a million tonnes capacity Iron & Steel plant
and a 0.8 million tonne capacity Coke Oven battery with by product recovery plant and a
captive power plant of 55 MW capacity.

SUPPORT SERVICES
 MMTC lays emphasis on human resources development and related activities. Several
training programmes are conducted to upgrade managerial skills in the latest
developments in trade management, export marketing, general management.
COMPUTERIZATION
 MMTC has a Systems & ERP Division comprising a highly professional team to cope
with the highly competitive environment. MMTC's operational offices are all equipped
with modern computing tools. ERP has been implemented. A user friendly intranet based
Knowledge Management Solution has been made available to officials.

SOCIAL AND WELFARE ACTIVITIES

 MMTC's social and welfare activities promote welfare of the employees through various
schemes like sports activities, liberal loan facilities like house building advance,
conveyance loan, house hold loan, marriage advance, etc. MMTC also provides
subsidized canteen facilities, medical treatment, residential accommodation in some of
the major cities for its employees. MMTC also takes care of employees' families through
merit scholarship, tuition fee reimbursement, etc.
 MMTC is committed towards environmental upkeepment through aforestation in the
mining areas, development of tribal areas and infrastructure development through rail
links, port facilities, etc.

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NETWORK OF OFFICES
Its vast international trade network, includes.
One wholly owned international subsidiary in Singapore- MMTC Transnational Pte. Ltd.
(MTPL)
13 Regional offices
East Zone : Kolkata, Bhubaneshwar
West Zone : Mumbai, Goa, Ahmedabad
North Zone : Delhi, Jhandewalan (Delhi), Jaipur
South Zone : Bangalore, Bellary, Chennai, Hyderabad, Vizag

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COMPANY’S RECENT PERFORMANCE/ACTIVITIES

The highlights of company’s earnings during 2006-07,2007-08 is as below:-

(RS. IN MILLION)
2007-08 2006-07

EXPORTS 39,114 34,131

IMPORTS 204,499 186,074

DOMESTIC 20,621 12,811

OTHER TRADE EARNINGS 796 455

NET SALES/TRADING EARNINGS 265,030 233,461

TRADING PROFITS 4297 2,497

PROFIT BEFORE TAX 3,346 1,893

PROFIT AFTER TAX 2,005 1,268

RESERVES AND SURPLUS 9800 8321

SUBSIDIARY COMPANY
The wholly owned subsidiary of Company - MMTC Transnational Pte. Ltd. Singapore (MTPL)
was incorporated in October 1994 under the laws of Singapore with a share capital of USD 1
million. During the year 2007-08, MTPL achieved its highest ever business turnover of USD 557
million as against USD 545 million achieved last year. MTPL generated a Profit before tax of
Rs. USD 2.12 million and profit after tax of USD 1.95 million during 2007-08, registering
growth of 28% over previous year. The net worth of MTPL stood at USD 9.14 million as on 31st
March 2008. MTPL has so far paid total dividends exceeding the capital contributed by your
company in the wholly owned subsidiary besides multiplying its net worth by nine times since its
Page | 7
inception. MTPL continues to enjoy prestigious "Global Trader" (GT) status awarded to it by
International Enterprise Singapore since FY 2000. Pursuant to the provisions of Section 212 of
the Companies Act, 1956, the audited financial statements of MTPL together with Director's
Report & Auditor's report are attached herewith.

MMTC'S PROMOTED PROJECT-Neelachal Ispat Nigam Ltd. (NINL)

The company had set up Neelachal Ispat Nigam Limited (NINL) - an iron & steel plant of 1.1
million tones capacity, 0.8 million tonne coke ovens and by product unit with captive power
plant, jointly with Govt. of Orissa with total capital expenditure of nearly Rs. 2000 crores. The
project has firm Iron ore supply linkages and also has captive Iron ore mining rights for reserves
estimated at about 150 million tons.

Future Projects/ Joint Ventures

Aiming at diversification and with a view to add value to its existing trading operations,
Company has undertaken various strategic initiatives following public- private partnership route,
effectively integrating vertically, both backwards and forwards, to encompass the entire gamut of
the product process starting from the stage of manufacture and ending with distribution to the
ultimate consumer.
 These strategic initiatives to enhance company’s future sustainability include, in broad
terms, setting up of a commodity exchange (for which in principle approval of Forward
Market Commission has been received) and joining hands with an international producer
as a joint venture partner for setting up a gold /silver medallion manufacturing unit,
which would also include a gold refinery as an integral part.
 For effective marketing of the finished products from this unit, as well as jewellery from
other sources, company plans to set up in partnership with a leading Indian company, a
chain of retail stores at various cities in India for medallions, jewellery and its
homegrown brand of ’SANCHI’ silverware.
 Towards investing in mining infrastructure Company is promoting a joint venture
Company with M/s TATA Steel Ltd. for exploration and development of mines for
minerals, ferrous and non-ferrous ores, precious metals, diamonds and coal etc.

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 Company has been allotted a coal mine in Jharkhand having estimated reserves of about
700 million MT, pre-feasibility study of which has already commenced and application
for prospecting license submitted to the concerned authorities.
 In the area of logistics, company has already promoted development of a temporary jetty
at Ennore port for loading iron ore.
 Company has also received government approval for acquiring an equity stake in the
consortium, which has undertaken the project for construction of a permanent iron ore-
loading berth at Ennore to decongest Chennai port.
 To facilitate promotion of two-way trade, MMTC is progressing satisfactorily on setting
up of free trade and warehousing zones on lines similar to Special Economic Zones, at
Greater Noida, Haldia and Kandla.

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 GLOSSARY
OF
TERMS/DEFINITIONS
USED IN
STEEL INDUSTRY

Page | 10
(i) TERMS RELATED TO ‘IRON’:
Iron:

Iron is a base metal extracted from iron ore. Pure iron has melting point of 1530 Degree
Centigrade and density of 7.86 gm/cc.

Iron Making:

Iron making is the process of Reduction of iron ore using the relevant reducing agent
(Reductant).

Hot Metal (Liquid Iron):

It is the hot, liquid, metallic iron product obtained upon reduction of iron ore (normally in Blast
Furnace or in Corex Furnace).

It contains about 93-94% Iron (Fe) and other elements/impurities like Carbon (4%), Silicon

Hot metal is the primary input for production of steel in the Integrated Steel Plants.

Pig Iron:

A product in solid (lumpy) form obtained upon solidification of Hot Metal in Pig Casting
Machine.

It is called Pig or Pig Iron because of its typical humpy shape. It is produced in 2 broad
categories/grades:

a) Foundry Grade Pig Iron:

Pig iron used in the Foundries for production of Cast Iron (CI) Castings using Cupola Furnace.
This is the major use of pig iron.

b) Basic/Steel Making Grade Pig Iron:

Pig iron (including hot metal) used for production of Steel. Sponge Iron/ Direct Reduced Iron
(DRI)/

Hot Briquetted Iron (HBI):

Direct Reduced Iron (DRI):

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Solid metallic iron product obtained upon Direct Reduction of high grade iron ore in solid state
itself without being converted into liquid form like that in Blast Furnace.

Sponge Iron (SI):

DRI is also known as Sponge Iron because of its spongy micro structure.

Hot Briquetted Iron (HBI):

At times the DRI/SI coming out from the furnace is converted into a bigger compact mass i.e.
Briquettes for ease in transportation/charging in steel making furnace, which are known as Hot
Briquetted Iron (HBI). SI/ DRI/HBI is produced by reducing high quality iron ore lumps or

Iron ore pellets with the help of non-coking coal in Rotary Kiln (in Coal based Plants) or
with the help of Natural Gas in Shaft Furnace (known as Gas based plants).

SI/ DRI/HBI is primarily used for production of steel (as a substitute of steel melting scrap), in
the Electric Furnaces like the Electric Arc Furnace (EAF) or the Induction Furnace (EIF).
However, TISCO is using it in their blast furnace as substitute for iron ore or/sinter

(ii) Terms Related To ‘STEEL’ and 'STEEL PRODUCTS':

Steel
Steel is an iron based alloy containing Carbon, Silicon, and Manganese etc.
Steel making:
Steel making is the process of selective oxidation of impurities present in the charge material
(Hot metal/Scrap/DRI) in the presence of suitable fluxes in the Steel Melting Shops (SMS).
Steel/Steel Products as per Form/shape/size:

Liquid Steel:

The immediate hot molten steel product from Steel Melting Shop (LD Converter/Electric Arc
Furnace/Electric Induction Furnace/Energy Optimizing Furnace). It is further cast into
ingots/Semis. The by-product from SMS is called SMS slag.

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Ingot Steel (ingots):

The primary solid product obtained upon solidification of liquid steel in conventional, vertical,
Cast Iron Molds which are intended for rolling into intermediate/semi-finished products after re-
heating.

Ingots are normally very large and heavy weighing several tones (up to 15-20 tones).

Pencil Ingots: Small ingots in Kgs produced in mini-steel plants.

Semi-Finished Steel Products (Semis):

Intermediate solid steel products obtained by Hot rolling/Forging of ingots

(in conventional process) or by Continuous casting of liquid steel are known as Semis. These are
called so since they are intended for further rolling/forging to produce finished steel products.

Various types of semis are as under:

Blooms:

A Semi-finished product, usually in square (at times in rectangular) section of cross sectional
size exceeding 5”x5” (125mm X 125mm). In some of the modern mills, the term bloom is used
to cover such products of cross sectional size exceeding 8”x8”. These are inputs for producing
Heavy sections and Sheet piling section normally by hot rolling. At times, like in VSP, blooms
are used to produce billets by hot rolling in the Billet Mill.

Billets:

A semi-finished product which are similar to blooms but of smaller cross sectional size (usually
less than or 5’’x5’’/7’’x7’’. These are used as input material for production of Finished Steel
long products viz bars & rods, light sections etc.

Slabs:

A semi-finished Rectangular, wide, semi-finished steel product intended for production of

finished Hot Rolled Flat products viz Plates, sheets, Strips etc. They are normally of width 150-
250mm wherein width is at-least 3 or 4 times of thickness.

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Thin Slabs:

In modern thin slab casting machine, liquid steel is continuously cast into much thinner slabs of
35-50mm directly which are used for production of Finished Hot Rolled Flat products upon
heating on-line.

Finished Steel:

Products obtained upon hot rolling/forging of Semi-finished steel (blooms/billets/slabs).

These cover 2 broad categories of products, namely Long Products and Flat Products:

a) Long Products:

Finished steel products produced normally by hot rolling/forging of Bloom/billets/pencil ingots

into useable shape/sizes.

These are normally supplied in straight length/ cut length except Wire rods which are supplied in
ir-regularly wound coils.

Different types of long products are:

Bars & Rods: Long steel products obtained normally by hot rolling/forging of billets/blooms.
They include Rounds, Flats (flat bars),

Squares, Hexagons, Octagons etc. which find direct use in a wide variety of products in Engg,
& Agricultural, House hold, Furniture sector etc. with/without further processing.

CTD (Cold-worked Twisted & Deformed)/ TMT (Thermo Mechanically Treated) Bar &
Rods:

Hot rolled round bars/rods with indentations/ribs normally supplied in straight length or in folded
bundles. Used directly in civil construction·

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Wire Rod:

Hot rolled plain bar/rods (i.e. without indentation) in Coil Form, normally used to produce Steel
Wires and at times Steel Bright

Bars.

Angles, Shapes & Section: Hot rolled Structural Sections obtained by hot rolling of
blooms/billets. They include Angles, Channels, Girders, Joist, I Beams, H Beams etc used in
civil/mechanical construction.

Rails:

Hot rolled Rail Sections obtained upon hot rolling of Blooms/Billets. Used in rail ways/tram
ways, on which rail/tram moves.

Wires:

Wires are produced by cold drawing of wire rod through a die. They are normally supplied in
coils.

Bright Bars:

There are cold drawn/ ground/ Peeled plain bars produced from hot rolled plain bars/wire rods.
(Does not fall under the purview of MOS but under D/o IP&P).

Flat Products (Flat Rolled Products):

Finished steel thin flat products produced from slabs/thin slabs in rolling mills using flat rolls.
These are supplied in Hot Rolled (HR), Cold Rolled (CR) or in coated condition depending upon
the requirement.

Different types of flat products are:

Plate: Thick flat finished product of width: +500mm & Thickness: (+) 5mm which are supplied
in cut/straight length. Plates are normally produced/supplied in as hot rolled condition with or
without specific heat treatments.
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Sheet: Thin flat finished steel products, Width: +500MM, Thickness: (-) 5mm, Supplied in
cut/straight length.

Supplied in hot rolled /cold rolled/coated condition and accordingly, known as Hot Rolled (HR)
Sheets or Cold Rolled (CR) Sheets or Coated Sheets.

Strips: Hot/cold/coated Flat rolled products, supplied in regularly wound coils of super
imposed layers. Accordingly, known as HR Strips or CR Strips or Coated Strips. Depending
upon width, strips

Are sub-classified as wide strip or narrow strip as under:

a) Wide Strips :

b) Strips of widths 600mm & above. Also known as

Coils in India and Wide Coils in Europe etc. Accordingly, the terms HR Coils/Wide Coils or
CR Coils/ Wide Coils etc. are commonly used.

b) Narrow Strips: Strips of widths less than 600mm.

Hot Rolled (HR) flat products are produced by re-rolling of slabs/thin slabs at high temperature
(above 1000 Degree C) in Plate Mills (which produce plates) or in Hot Strip Mills (which
produce strips). Hot Rolled Strips are cut into straight length to produce HR Sheets or Thin
Plates.

Cold Rolled (CR) Strips are produced by cold rolling of HR Strips in Cold Rolling Mills
(normally at room temperature). CR Strips are cut to produce CR sheet. CR Strips/sheets are
characterized by lower thickness, better/bright finish, closer dimensional tolerance and specific

Mechanical/metallurgical properties. They are directly used in automobiles (cars/ scooters,

motorcycles etc.), white goods, consumer durable etc. or for production of coated sheet products.

Cold Rolled Sheets/Strips are supplied in as rolled condition (CRFH- Cold Rolled Full Hard) or
in closed annealed (CRCA –Cold Rolled Close Annealed) condition or in closed annealed & skin
passed/temper passed condition, depending upon the requirement of the end users.

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Coated Products: There are cold rolled products coated with metals or organic chemicals as
under:

i) Galvanised Plain/ Corrugated (GP/GC) Sheets: These are Cold Rolled Sheets/Strips coated
with zinc metal. Process is known as Galvanising. Used in roofing, paneling etc.

GP sheets are normally produced by Hot Deep Galvanising of CR Sheets/Strips in liquid zinc
bath. GC sheets are obtained upon corrugating of GP sheets in corrugating machine. Although
not practiced in India, GP sheets are also produced by electroplating of zinc on CR sheets/strips
when the process is known as Electro-Galvanising.

Galvanised sheets are used mainly in roofing, paneling, automobile bodies, Trunks/Boxes etc.

ii) Tinplate: TMBP coated with tin metal. Used for manufacture of containers.

iii) Tin Free Steel: TMBP sheet/strips coated with chromium metal and chromium oxide.

iv) Color coated products:

Cold Rolled/ galvanised steel sheets/strips coated with PVC/ plastics or any other organic
material. Process known as Color Coating. Used for mfr. of furniture, auto bodies, roofing,
paneling etc.

V) Terni plate:

Cold rolled steel sheets/strips coated with an alloy of tin and lead, used in manufacture of Petrol
Tanks for automobiles. Not produced in India.

Galfan alloy coated sheets:

These are CR Sheets/Strips coated with a Zinc- Aluminum alloy comprising of 95% zinc and
5% aluminum. Uses are similar to GP/GC sheets but it has better life and better corrosion
properties.

Galvalume alloy coated sheets: These are CR Sheets/ Strips coated with an alloy comprising of
approx. 55% aluminum and approx. 45% zinc with nominal amount of silicon. Uses are similar
to that of GP/GC sheets but it has better life and much better high temperature performance.

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Crude Steel:

The term is internationally used to mean the 1st solid steel product upon solidification of liquid
steel. In other words, it includes Ingots (in conventional mills) and Semis (in modern mills with
continuous casting facility). According to International Iron & Steel Institute (IISI), for statistical

Purpose, crude steel also includes liquid steel which goes into production of steel castings.

Saleable Steel:

The term is used to designate various types of solid steel products, which are

Sold to outside customers for further processing or for direct use/consumption. Therefore, it
includes ingots and/or semis and/or finished steel products. (Liquid steel is normally not traded).

Steel as per Composition:

1. Alloy Steel:

Steel which is produced with intended amount of one or more alloying elements in specified
proportions to impart specific physical, mechanical, metallurgical and electrical properties.

Common alloying elements are manganese, silicon, nickel, lead, copper, chromium, tungsten,
molybdenum, niobium, vanadium etc.

Some of the common examples of alloy steels are:

(a) Stainless Steel: which essentially contains chromium (normally more than 10.5%
with/without nickel or other alloying elements. As the name implies, stainless Steel resist
staining/corrosion and maintains strength at high temperatures.

Used widely in Utensils, architectures and in Industrial applications viz automotive & food
processing products as well as medical & health equipment.

Commonly used grades of stainless steels (SS) are:

Type 304: Chrome –Nickel Austenitic S S accounting for more than half of SS produced in the
world. 18:8 SS used for utensils are the most common example.

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Type 316: Chrome –Nickel (Austenitic) SS containing 2-3% Molybdenum , intended for
specific industrial use. · Type 410: Plain Chromium (Martensitic) S S with exeptional strength. It

is a low cost, heat treatable grade suitable for non-corrosive applications.

Type 430: Plain Chrome (Ferritic) S S, offering general purpose corrosion resistance, often in
decorative applications.

Type 201/202 etc.: Low Nickel Austenitic S S containing 2-5% Nickel. Used as cheaper
substitute of Type 304 grade for production of utensils.

(b) Silicon-Electrical steel: which usually contains 0.6 – 6% silicon and exhibit certain
magnetic properties, which make it suitable for use in transformers, power generators, and
electric motors. They are normally supplied in 2 categories:

i) CRGO: Cold Rolled Grain Oriented Silicon-electrical steel sheets/strips, normally

recommended for use in transformers and generators.

ii) CRNO/CRNGO: Cold Rolled Non-Grain Oriented Silicon-electrical steel sheets/strips,

normally recommended for use in rotating machines such as electric motors.

(c) High Speed Steel: Alloy steel containing tungsten, vanadium, chromium, cobalt and other
metals. Depending upon composition, they are classified as Cobalt Grade abd Non-Cobalt Grade.
Used for manufacture of cutting tools.

2. Non-alloy /Carbon Steel/Plain carbon /Un-alloyed Steel:

These steels by definition do not contain any alloying element in specified proportions (i.e.
beyond those normally present in commercially produced steel in industry).

Non- alloy steel is divided into 3 categories namely

(i) Low carbon steel or Mild steel (normally containing up to 0.3% carbon

(ii) Medium carbon steel (normally containing 0.3 – 0.6% carbon) and

(iii) High carbon steel (normally containing more than 0.6% carbon).

Non-alloy steel constitutes approx. 90% of total steel production, of which,

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Mild steel takes the lion’s share.

3. Special Steel:

Steel, in production of which special care has to be taken so as to attain the special/desired
properties, such as, cleanliness, surface qualities and mechanical/ metallurgical properties.

In layman’s language, all steel other than mild steel fall under the category of special steel. But
metallurgic ally, even mild steel/low carbon steel i.e. containing less than 0.25%/0.30% carbon,
may still fall under the category of special steel if any special properties is specified in the steel.
Examples are DD / EDD steel, Forging Quality steel, Free cutting steel etc.

Classifications of Steel based on end use:

In terms of uses, steels are often classified as Structural steels, Construction steel, Deep
Drawing Steel, Forging quality, Rail steel and the like.

(vi) MISCELLANEOUS TERMS:

Fluxes:

Limestone, Dolomite, etc. used in Iron/ Steel making which react with the undesirable gangue
material/ impurities and removed ash slag.

Master alloys used for de-gassing/ de-oxidizing/alloying in steel making. Common varieties are
Ferro silicon, Ferro manganese, silicon manganese, Ferro chrome, Ferro nickel etc.

Refractories:

Heat resistant bricks/ shapes/ monolithic mass used for construction/ lining of reaction vessels/
furnaces. Common varieties are Silica, Magnesite, Dolomite, Alumina, Fire-clay, Mag-carbon,
Mag-chrome etc.

Steel Melting Scrap: Steel waste/scrap not usable as such in its existing form which is further
re-melted to produce liquid steel to produce various products. Depending on their form/type,
they are classified as Heavy Melting Scrap, Light Melting Scrap, and Turnings/borings etc.

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Re-rollable Scrap: Seconds & defective products, Cuttings/end cuttings, Used steel products
like used rails etc which could be directly used for rerolling (without resorting to re-melting) into
finished products for specified applications. These are substitutes of steel billets /pencil ingots.
Ship breaking generates substantial quantity of re-rollable steel scrap.

Integrated Steel Plants:

Steel plants using iron ore as the basic raw material for production of crude steel which is
further rolled into finished shapes in-house. Conventionally, these plants have captive coke
ovens also and the sensible heat of the outgoing gases from iron/coke making is utilized as fuel
for various applications. It therefore, includes units with in-house coke making (optional), iron
making followed by production of liquid steel & crude steel and finished

Steel. So all ISPs adopting BF- BOF route and Major producers adopting Corex-BOF or DRI-
Afro MBF-EOF technology would technically, fall under this category.

Mini Steel Plants:

Conventionally, EAF/IF based steel plants with/ without captive rolling mills was covered under
this category. However, now all steel plants (based on any technology) of capacity up to 5 lakh
tpa are covered under this category.

Primary Steel Producers:

Steel (crude and/or finished steel) producers using iron ore as the basic raw material/input. It
therefore, includes in-house iron making followed by production of liquid steel & crude steel

With/without in-house rolling. So all ISPs adopting BF- BOF route and Major producers
adopting Corex - BOF or DRI-EAF or MBF-EOF technology would fall under this category.

Hot Rolling: Rolling of Steel at above the recrystallization temperature of steel (normally above
1000 C) to produce Hot Rolled Long products/Flat Products from semis. Ingots are also hot
Page | 21
rolled to get semis. At times blooms are also hot rolled to produce Billets. Rolling Mills used for
hot rolling are known as Hot Rolling Mills.

Cold Rolling: Rolling of steel (normally flat products) below the recrystallization temperature
of steel (normally at Room Temperature) to produce cold rolled sheets /strips /coils. Mills used
for the purpose are called Cold Rolling Mills.

2Hi/4 Hi/6 Hi/20 Hi Mills: Rolling Mills are classified as 2-High / 2 Hi, 4 Hi and so on
depending on Number of Rolls used in the arrangement/configuration of rolls in single stand. For
example, a 2 Hi mill consist of 2 rolls one above the other known as Upper roll and the Lower

Roll. In a 4 Hi mill, there are 4 rolls in a stand—2 upper rolls one above the other and 2 lower
rolls one above the other.

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PRODUCT
ANALYSIS

Page | 23
 STEEL
Steel is an alloy consisting mostly of iron, with a carbon content between 0.2% and 2.14% by
weight (C: 110–10Fe), depending on grade. Carbon is the most cost-effective alloying material
for iron, but various other alloying elements are used such as manganese, chromium,
vanadium, and tungsten,Carbon and other elements act as a hardening agent, preventing
dislocations in the iron atom crystal lattice from sliding past one another. Varying the amount of
alloying elements and form of their presence in the steel (solute elements, precipitated phase)
controls qualities such as the hardness, ductility, and tensile strength of the resulting steel. Steel
with increased carbon content can be made harder and stronger than iron, but is also more brittle.
The maximum solubility of carbon in iron (as austenite) is 2.14% by weight, occurring at 1149
°C; higher concentrations of carbon or lower temperatures will produce cementite. Alloys with
higher carbon content than this are known as cast iron because of their lower melting point and
castability. Steel is also to be distinguished from wrought iron containing only a very small
amount of other elements, but containing 1–3% by weight of slag in the form of particles
elongated in one direction, giving the iron a characteristic grain. It is more rust-resistant than
steel and welds more easily.

PIG IRON

Pig iron is raw iron, the immediate product of smelting iron ore with coke and lime stone in
a blast furnace.pig iron has a very high carbon content, typically 3.5%, which makes it
very brittle and not useful directly as a material except for limited applications.

 Pig iron is a basic input for making iron casting. Which find application in industrial and
other sectors of the economy. In advanced countries pig iron is also used as a partial
substitute of melting scrap in the change-mix of electric arc furnace. Pig iron is mainly

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 classified into two grades “basic grade” and “foundry grade”. Basic grade is used for
making steel and foundry grade is used for manufacturing iron casting.
 Pig iron is typically poured directly out of the bottom of the blast furnace through a
trough into a ladle car for transfer to the steel plant in liquid form, referred to as “hot
metal”. The hot metal is then charged into a steel-making vessel to produce steel,
typically with an electric arc furnace or basic oxygen furnace, by burning off the excess
carbon in a controlled fashion and adjusting the alloy composition. Earlier processes for
this included the Bessemer process, open hearth furnace, finery forge, and the puddling
furnace.

SPECIFICATION SILICON% CARBON% MANGNEASE% SULPHUR% PHOSPHOROUS

%MAX %MAX % MAX

BASIC GRADE <1.24 3.6-4.3 1 0.05 0.15

FOUNDARY 2-3 3.5-4 0.5-1 0.06 0.20

GRADE

Fig:- Specification of pig iron

HOT ROLLING

Hot rolling is a hot metalworking process where large pieces of metal, such as slabs or billets,
are heated above their recrystallization temperature and then deformed between rollers to form
thinner cross sections. Hot rolling produces thinner cross sections than cold rolling processes
with the same number of stages. Hot rolling, due to recrystallization, will reduce the average

Page | 25
grain size of a metal while maintaining an equiaxed microstructure where as cold rolling will
produce a hardened microstructure.

PROCESS

 A slab, billet, or ingot is passed or deformed between a set of work rolls revolving at the
same speed, but in opposite directions. The distance between the work rolls is slightly
less than that of the passing metal which allows for thinning. The temperature of the
metal is generally above its recrystallization temperature, as opposed to cold rolling,
which takes place below this temperature. Hot rolling permits large deformations of the
metal to be achieved with a low number of rolling cycles. As the rolling process breaks
up the grains, they recrystallize maintaining an equiaxed structure and preventing the
metal from hardening. Hot rolled material typically does not require annealing and the
high temperature will prevent residual stress from accumulating in the material resulting
better dimensional stability than cold worked materials.
 Hot rolling is primarily concerned with manipulating material shape and geometry rather
than mechanical properties. This is achieved by heating a component or material to its
upper critical temperature and then applying controlled load which forms the material to
a desired specification or size. The degree of change to the metal is directly related to the
heat of the metal, high heats allowing for greater thinning

COLD ROLLING

Cold rolling is a metalworking process in which metal is deformed by passing it through rollers
at a temperature below its recrystallization temperature. Cold rolling increases the yield strength
and hardness of a metal by introducing defects into the metal's crystal structure. These defects
prevent further slip and can reduce the grain size of the metal, resulting in Hall-Petch hardening.
Page | 26
Cold rolling is most often used to decrease the thickness of plate and sheet metal.

PHYSICAL METALLURGY OF COLD ROLLING

 Cold rolling is a method of cold working a metal. When a metal is cold worked,
microscopic defects are nucleated throughout the deformed area. These defects can be
either point defects (a vacancy on the crystal lattice) or a line defect (an extra half plane
of atoms jammed in a crystal). As defects accumulate through deformation, it becomes
increasingly more difficult for slip, or the movement of defects, to occur. This results in a
hardening of the metal.
 If enough grains split apart, a grain may split into two or more grains in order to
minimize the strain energy of the system. When large grains split into smaller grains, the
alloy hardens as a result of the Hall-Petch relationship. If cold work is continued, the
hardened metal may fracture.
 During cold rolling, metal absorbs a great deal of energy. Some of this energy is used to
nucleate and move defects (and subsequently deform the metal). The remainder of the
energy is released as heat.
 While cold rolling increases the hardness and strength of a metal, it also results in a large
decrease in ductility. Thus metals strengthened by cold rolling are more sensitive to the
presence of cracks and are prone to brittle fracture.
 A metal that has been hardened by cold rolling can be softened by annealing. Annealing
will relieve stresses, allow grain growth, and restore the original properties of the alloy.
Ductility is also restored by annealing. Thus, after annealing, the metal may be further
cold rolled without fracturing.

DEGREE OF COLD WORK

Cold rolled metal is given a rating based on the degree it was cold worked. "Skin-rolled" metal
undergoes the least rolling, being compressed only 0.5-1% to harden the surface of the metal and

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make it more easily workable for later processes. Higher ratings are "quarter hard," "half hard"
and "full hard"; in the last of these, the thickness of the metal is reduced by 50%.

COLD ROLLING AS A MANUFACTURING PROCESS

Cold rolling is a common manufacturing process. It is often used to form sheet metal. Beverage
cans are closed by rolling, and steel food cans are strengthened by rolling ribs into their sides.
Rolling mills are commonly used to precisely reduce the thickness of strip and sheet metals.

HOT ROLLED COILS, SHEETS AND SKELPS

Hot rolled coils, sheets and skelps (narrow coil), are the largest product category in terms of
both sales volume and revenue. Hot rolled coils are primarily used for making pipes and have
many direct industrial and manufacturing applications, including the construction of tanks,
railway cars, bicycle frames, ships, engineering and military equipment and automobile
and truck wheels, frames and body parts. Hot rolled coils are also used as feed stock for cold
rolling mills where they undergo further process-ing.hot rolled coils are delivered to any
company’s own cold rolling mills and silicon sheet mills and pipe plant in aide range of widths
and thicknesses as the feedstock for higher value added steel products. SAIL is the largest
producer of coils, sheets and skelps in INDIA.

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USES OF HOT ROLLED PRODUCTS

Hot Rolled Steel for General Structures

Steel for general structures and welded structures are produced for steel structures, bridges,
ships, and automobiles.

Atmospheric Corrosion Resistant Steel

With the addition of special elements such as P, Cu, and C, this steel type has enhanced
corrosion and atmospheric corrosion resistant properties. It is used for the production of
containers, special vehicles, and building structures.

Hot Rolled Steel for Automotive Parts

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Outstanding in its drawability and weldability, this high-strength steel is used in automobile
frames and wheels

Hot Rolled Steel for Special Applications

This steel type includes carbon steel for general machinery, alloy steel, and tool steel. After the
heat treatment process, the steel is used in a variety of machine parts.

Carbon steel pipes for machines

Steel for High-Pressure Gas Cylinders

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Superior in formability and pressure resistance capacity, this steel is used in high-pressure gas
containers with the inner capacity to hold less than 500 liters of LPG, acetylene, and other high-
pressure gases.

Steel for Oil Well Pipes

This high-quality steel is used for drilling in extremely cold regions and deep sea oil wells since
this steel is marked by its extremely low temperature toughness, high weldability, and excellent
fracture resistance.

Steel for Pipelines

This steel makes excellent pipeline material because of its strength, extremely low temperature
toughness, hydrogen-induced crack resistance, and weldability

Page | 31
HOT-ROLLED STEEL SHEET AND COIL FOR AUTOMOTIVE STRUCTURAL USES

Specification

CODE THICKNESS C% Si % Mn% P % S% Nb%

(MM)

A TOS55 4.5-12.7 0.2 <0.4 <1.5 <0.03 <0.03 <0.05

ATOS60 3.2-12.7 <0.20 <0.4 <1.5 <0.03 <0.03 <0.05

PHYSICAL PROFILE OF HOT ROLLED COILS

WIDTH 750mm-2000mm

THICKNESS 1.6mm-20mm

INNER DIAMETER 762mm.

OUTER DIAMETER 2000mm.

SHEET LENGTH 2000-6000mm,

4000-12500mm

COIL WEIGHT 25 MT max

Page | 32
H R COIL packaging and marking

PACKAGING

Nude packaging

Skin-paper packaging

Page | 33
Metal packaging

Fig:- MARKING IN POSCO STEEL COMPANY

Page | 34
COLD ROLLED PRODUCTS

Cold rolling of hot rolled products produces a superior surface finish, improves the physical

properties of the steel, such as tensile strength, and reduces its thickness to precise gauges. As a

result, cold rolled products generally command higher prices than hot rolled products. The

products of the cold rolling mill include cold rolled sheet and coils, which are used primarily for

precision tubes, containers, bicycles, furniture and for use by the automobile industry to produce

car body panels. Cold rolled products are also used for further processing, including for color

coating, galvanizing and tinning. Further use of cold rolled coils is producing galvanised sheet

and tin plates.

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PHYSICAL PROFILE OF COLD ROLLED PRODUCTS

WIDTH 800 -1560 MM

THICKNESS 0.25 -3.20MM

INNER DIAMETER 508 MM

OUTER DIAMETER 1900 MM MAX

SHEET LENGTH 2000-6000mm,4000-12500mm

COIL WEIGHT 25 MT Max

THICKNESS TOLERANCE

+/- 0.5% of nominal thickness at centre line for 98.5% of the coil length

CHEMICAL COMPOSITION OF COLD ROLLED COILS AND SHEETS

specifications grade C%max Mn% max P % max S % max hardness

IS513/1994 O 0.15 0.60 0.055 0.055

D 0.12 0.50 0.040 0.040 65

DD 0.10 0.45 0.035 0.035 57

EDD 0.08 0.40 0.030 0.030 50

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FURTHER PROCESSING OF CR COIL

GALVANISED PRODUCTS

In keeping with the commitment to redefine the future of Indian steel, the state-of-the-art

Galvanizing Line at the various Cold-Rolling Mill complex produces 1000,000 tons of superior

quality galvanised products.

PRODUCTS

 Galvanised Plain Spangled

 Galvanised Plain with differential coating

 Galvanised Plain zero spangle

 Galvanised Plain skin passed

 Galvannealed(GA)

BENEFITS

Coated Sheet offers the following advantages

 Good Corrosion Resistance:

Page | 37
Galvanising protects steel against corrosion by means of a barrier and a sacrificial (cathodic
protection) effect, so that protection continues even in the event of coating damage or when the
edges are bared.

 Excellent Paintability:

The zinc-alloy surface of moderate roughness increases paintability

properties.Galvannealed/Galvanised sheet is most suitable for painted applications.

 Easy Weldability:

As the coating layers are made of zinc-alloy, Tata Steel's Coated Sheet is easier to weld than
ordinary Galvanised Sheet.

 Wide Material Selection:

Various grades and sizes of material can be selected to meet diversified requirements for
automobiles, appliances, construction, etc.

AREAS OF APPLICATION

Automotive body parts require steel sheets that have enhanced

paintability, weldability and corrosion resistance. Galvannealed
Sheet is ideally suited for automobile applications.

 Automotive body exposed panels

 Automotive body unexposed panels
 Automotive parts

Due to its corrosion resistance and excellent paint ability properties, Skin-passed
Galvanised Sheet with zero spangles find application in a variety of white goods.

 Washers

Page | 38
  Refrigerators
 Air-conditioners
 Vending Machines
 Microwaves
 Audio-Visual Systems

Although steel is largely regarded as being heavy and cumbersome, the exact opposite is true in
the case of coated steel products for residential framing. Light, easy to handle and economical,
this sheet is a superior quality alternative to traditional wood framing materials or RCC. Coated
steel also offers builders a strong and dimensionally stable framing system. Apart from this,
GI/GA steel guarantees longevity, and therefore, proves to be more valuable. In painted or
unpainted conditions, it is used in the following building and architectural applications:

 Roofs
 Floor decks
 Roll formed panels (industrial of commercial buildings)
 Cladding on standard building materials.

THE WORLD'S FIRST BRANDED COLD ROLLED

STEEL

Tata Steel announced the launch of the world's first branded Cold Rolled Steel - Tata Steelium.

Tata Steelium, apart from providing a certain level of quality, assures customer of the genuineness
of the product. It goes a long way in meeting their challenge of gaining a sustainable competitive
edge in the marketplace. With the name 'Tata Steelium' being marked on the product itself, now
customer can be assured of the authenticity of their purchase.

Page | 39
SOME OTHER USES OF CR STEEL

Commercial Steel

This type of steel is used for general purposes. In particular, it is appropriate for manufacturing
refrigerator doors, drums and furniture as well as for automobile roofs, Fenders, hoods, quarters,
oil pans and spring houses.

StructuralSteel

This structural steel does not need drawability but require strength.

Enameling

This type of steel can be classified into deep drawing, drawing and general types, Depending on
manufacturing methods and final usages. Generally, drawing and deep drawing steels are used for
bathtubs, washers and household appliances while commercial sheets are mainly used for
kitchenware, which does not require much Drawability .

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High Tensile Strength Steel

This type of steel can be divided into commercial, drawing, deep drawing and TRIP Steels,
depending on manufacturing methods and end applications. In general, commercial steel is used
for automobile seats, rail levers and parking brakes while Drawing steel is used for center floors
and brackets. Deep drawing steel is Appropriate for fenders and hoods, and TRIP steel for car
doors and bumpers.

PACKAGING AND MARKING

packaging

Fig:-COIL PACKAGING

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 Fig:-SHEET PACKAGING

Fig:- MARKING OF A POSCO STEEL PRODUCT

Page | 42
FIG: - PROCESS OF MAKING SLABS, HOT ROLLED COILS, COLD ROLLEDCOILS

Page | 43
ELECTRICALSTEEL
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Electrical steel, also called lamination steel, silicon electrical steel, silicon steel or
transformer steel, is specialty steel tailored to produce certain magnetic properties, such as a
small hysteresis area (small energy dissipation per cycle, or low core loss) and high
permeability.

The material is usually manufactured in the form of cold-rolled strips less than 2 mm thick.
These strips are called laminations when stacked together to form a core. Once assembled,
they form the laminated cores of transformers or the stator and rotor parts of electric motors.
Laminations may be cut to their finished shape by a punch and die, or in smaller quantities
may be cut by a laser, or by wire erosion.

METALLURGY

Electrical steel is an iron alloy which may have from zero to 6.5% silicon (Si: 5Fe). Silicon
significantly increases the electrical resistivity of the steel, which decreases the induced eddy
currents and thus reduces the core loss. Manganese and aluminum can be added up to 0.5%.

Page | 44
Increasing the amount of silicon inhibits eddy currents and narrows the hysteresis loop of
the material, thus lowering the core losses. However, the grain structure hardens and
embrittles the metal, which adversely affects the workability of the material, especially when
rolling it. When alloying, the concentration levels of carbon, sulfur, oxygen and nitrogen
must be kept low, as these elements indicate the presence of carbides, sulfides, oxides and
nitrides. These compounds, even in particles as small as one micrometer in diameter, increase
hysteresis losses while also decreasing magnetic permeability. The presence of carbon has a
more detrimental effect than sulfur or oxygen. Carbon also causes magnetic aging when it
slowly leaves the solid solution and precipitates as carbides, thus resulting in an increase in
power loss over time. For these reasons, the carbon level is kept to 0.005% or lower. The
carbon level can be reduced by annealing the steel in a decarburizing atmosphere, such as
hydrogen.

GRAIN ORIENTATION

There are two main types of electrical steel: grain-oriented and non-oriented.

 Grain-oriented electrical steel usually has a silicon level of 3% (Si: 11Fe). It is

processed in such a way that the optimum properties are developed in the rolling
direction, due to a tight control (proposed by Norman P. Goss) of the crystal
orientation relative to the sheet. Due to the special orientation, the magnetic flux
density is increased by 30% in the coil rolling direction, although its magnetic
saturation is decreased by 5%. It is used for the cores of high-efficiency
transformers, electric motor and generators.
 Non-oriented electrical steel usually has a silicon level of 2 to 3.5% and has similar
magnetic properties in all directions, which makes it isotropic. It is less expensive and
is used in applications where the direction of magnetic flux is changing, such as
electric motors and generators. It is also used when efficiency is less important or
when there is insufficient space to correctly orient components to take advantage of
the anisotropic properties of grain-oriented electrical steel.

Page | 45
 APPLICATION OF COLD ROLLED GRAIN ORIENTED

ELECTRICAL STEEL (CRGO) AND COLD ROLLED NON

GRAIN ORIENTED ELECTRICAL STEEL(CRNGO).

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Page | 46
 Fig:-some uses of electrical steel

 Grain oriented Electrical Steel CRGO is undoubtedly the most important soft
magnetic material in use today. Whether in small transformer, distribution
transformer or in large transformer & generator, grain oriented electrical steel
CRGO is a must for the production of energy saving electrical machines.
 Grain oriented Electrical Steels are iron-silicon alloys that provide low core loss and
high permeability needed for more efficient and economical electrical transformers.
CRGO Grain oriented grades of electrical steel are typically used for transformer
cores and large generators.
 Non-oriented Electrical steel CRNGO fully processed steels are iron-silicon alloys
with varying silicon contents and have similar magnetic properties in all directions in
plan of the sheet. Non-oriented Electrical steel are principally used for motors,
generators, alternators, ballasts, small Transformers and a variety of other
electromagnetic applications.
 The earliest soft magnetic material was iron, which contained many impurities.
Researchers found that the addition of silicon increased resistivity, decreased
hysteresis loss, increased permeability, and virtually eliminated aging.
 Substantial quantities of Grain Oriented Electrical steel CRGO are used, mainly in
power and distribution transformers. However, it has not supplanted non-oriented
Electrical steel, which is used extensively where a low-cost, low-loss material is
needed, particularly in rotating equipment. Mention should also be made of the relay
steels, used widely in relays, armatures, and solenoids. Relay steels contain 1.25
to 2.5% Si, and are used in direct current applications because of better permeability,
lower coercive force, and freedom from aging.
 Important physical properties of Electrical steels (CRGO) include resistivity,
saturation induction, magneto-crystalline anisotropy, magnetostriction, and Curie
temperature. Resistivity, which is quite low in iron, increases markedly with the
addition of silicon. Higher resistivity lessens the core loss by reducing the eddy
current component. Raising the silicon content will lower magnetostriction, but
processing becomes more difficult. The high Curie temperature of iron will be

Page | 47
 lowered by alloying elements, but the decrease is of little importance to the user of
CRGO Electrical steels.
 The magnetization process is influenced by impurities, grain orientation, grain size,
strain, strip thickness, and surface smoothness. One of the most important ways to
improve soft magnetic materials is to remove impurities, which interfere with domain-
wall movement; they are least harmful if present in solid solution. Compared with
other commercial steels, Electrical steel is exceptionally pure. Because carbon, an
interstitial impurity, can harm low induction permeability, it must be removed before
the steel is annealed to develop the final texture.
 The mechanism for the growth of grains with cube-on-edge orientation during the
final anneal is not completely understood. The process involves secondary
recrystallization, which, by definition, is characterized by accelerated growth of one
set of grains in an already recrystallized matrix.
 For secondary recrystallization, normal grain growth must be inhibited in some
manner. As the temperature is raised, certain grains break loose from the inhibiting
forces, and grow extensively at the expense of their neighbors. Producers know that,
on a practical basis, appropriate cold rolling and recrystallization sequences must be
carefully followed to obtain the desired secondary recrystallization nuclei and the
correct texture. Today`s Electrical Steels use MnS as the grain growth inhibitor, but
other compounds, such as carbides, oxides, or nitrides, are also effective.

CRGO MAKING AND USING GRAIN ORIENTED ELECTRICAL STEEL :-

 Grain Oriented Electrical Steel (CRGO) is more restricted in composition than non-
oriented varieties. The texture is developed by a series of careful working and
annealing operations, and the material must remain essentially single-phase
throughout processing, particularly during the final anneal because phase
transformation destroys the texture. To avoid the y loop of the Fe-Si phase system,
today's commercial steel has about 3.25% Si. Higher silicon varieties, which might be
favored on the basis of increased resistivity and lower magnetostriction, are precluded

Page | 48
 by difficulties in cold rolling.
 Temperature, atmosphere composition, and dew point are closely controlled to
decarburize the strip without oxidizing the surface. During this treatment, primary
recrystallization occurs, forming small, uniform, equiaxed grains. The coating of
magnesium silicate glass which forms will provide electrical insulation between
successive laminations when assembled in a transformer core. At this stage, the
Electrical steel is graded by cutting Epstein samples from the coil; the samples are
stress relief annealed and flattened at 790°C, and tested for core loss.
 Applications for CRGO Grain oriented Electrical Steel include transformers (power,
distribution, ballast, instrument, audio, and specialty), and generators for steam
turbine and water wheels.
 Lay-up cores, in general, utilize the whole spectrum of Grain Oriented Electrical steel
CRGO quality and gages. The gage and grade of material for a given application are
determined by economics, transformer rating, noise level requirement, loss
requirements, density of operation, and even core size. Because the strip must be flat
to produce a good core, coils are flattened after the high temperature anneal. Then, the
strip is coated with an inorganic phosphate for insulation. Samples from each coil end
are graded after a laboratory stress relief anneal, as previously described. From such
strip, the transformer manufacturer cuts his required length improves the insulation of
the strip. Consequently, it decreases the eddy current losses and heat buildup, which is
of particular importance in transformers which must withstand an impulse test.
 As noted earlier, an important requirement in the manufacture of lay-up cores is
minimizing transformer noise. Noise is a function of manufacturing and core design
factors, the core material characteristic being one of the most important. The
dependence of magnetostriction on silicon content has already been noted. In
addition, magnetostriction is reduced by improving the texture and by introducing
tensile stresses through application of glass-type insulation coatings. Because
compressive stresses affect magnetostriction adversely, it is important that the
lamination remains flat for assembly. Operating induction is also a factor that affects
noise, and indeed affects the transformer`s general operating characteristics.
Operating inductions of lay-up transformers are usually in the 10,000 to 17,000 G

Page | 49
 range; power ratings extend over the 500 to 1,000,000 kVA range.
 Wound cores made from Grain Oriented Electrical Steel are wound toroidally with the
[100] crystallographic direction around the strip. Processing steps are somewhat
different from those used for lay-up transformers though the starting material is the
same-large toroidally annealed coil coated with magnesium silicate, which usually
provides sufficient insulation.
 Grain oriented Electrical steel CRGO for wound core application, unreacted MgO
powder is removed from the strip surface, and a sample from each coil end is cut into
Epstein strips to be tested as before. After being graded, the coil is shipped to the
transformer manufacturer either as slit multiples or as a full-width coil for subsequent
slitting. The slit multiple, wound to the given core dimension, must be stress relief
annealed at 790°C in a dry nonoxidizing atmosphere. Annealing trays and plates must
be of low carbon steel to eliminate any carbon contamination, which can be very
detrimental to quality.
 After CRGO being stress relief annealed, the cores are cut, and the CRGO
transformer core is assembled by lacing the steel around the copper (or aluminum)
current-carrying coils. In the stress relief annealed condition, Grain-Oriented steel
CRGO electrical steel is sensitive to mechanical strain; therefore, cores must be
assembled carefully. Regardless of how carefully assembly is accomplished, the final
core quality is always poorer than it was in the stress-relief annealed, uncut condition.
 The difference in quality, commonly referred to as the "destruction factor", is due to
the relative strain sensitivity of the Grain-Oriented CRGO steel, the handling
procedure in fabrication, and the uniformity and amount of air gap in the core. Being
a function of the transformer design and fabrication, the latter two factors are
controlled best by the manufacturer. Most CRGO wound cores are utilized in
distribution transformer applications of 25 to 500 kVA.

MAKING AND USING CRNGO ELECTRICAL STEELS

 Non-oriented electrical steels do not use a secondary recrystallization process to

develop their properties, and high temperature annealing is not essential. Therefore, a

Page | 50
 lower limit on silicon, such as is required for the oriented grades, is not essential.
 Non-Grain Oriented Electrical steel grades contain between 0.5 and 3.25% Si plus up
to 0.5% Al added to increase resistivity and lower the temperature of primary
recrystallization. Grain growth is very desirable in the (CRNGO) non-oriented
electrical steel grades, but is generally much smaller than for the oriented electrical
steel CRGO grades.
 Processing to hot rolled band is similar to that described for the oriented grade. After
surface conditioning, the bands are usually cold rolled directly to final gage, and sold
to the transformer manufacturer in one of two conditions fully-processed, or semi
processed. After final cold rolling, the strip is annealed, decarburizing it to 0.005% C
or lower and developing the grain structure needed for the magnetic properties.
Samples are then taken from each coil end, and tested.
 CRNGO Fully processed non-Grain oriented Electrical steels are generally used in
applications in which:
1. Quantities are too small to warrant stress relieving by the consumer, or
2. CRGO Grain Oriented Laminations are so large that good physical
shape would be difficult to maintain after an 843°C stress relief anneal.
 Non-Grain Oriented steels CRNGO are not as sensitive to strain as the oriented
product. Consequently, shearing strains constitute the only strain effects, which
should degrade the magnetic quality. Because laminations are generally large, these
shearing strains can be tolerated. Most of the fully processed grades are used as
stamped laminations in such applications as rotors and stators.
 The non-oriented electrical steels (CRNGO) have a random orientation. They are
commonly used in large rotating equipment, including motors, power generators, and
AC alternators. Fully processed steels are given a "full" strand anneal (to develop the
optimum magnetic quality), making them softer and more difficult to punch than
semi-processed products. Grades with higher alloy content are harder and thus easier
to punch.
 Improved punchability can be provided in fully processed steels by adding an organic
coating, which acts as a lubricant during stamping and gives some additional
insulation to the base scale. If good inter-lamination resistance is required, fully

Page | 51
 processed material can be purchased with core plate.
 Semi processed Grain Oriented electrical steel CRGO products are generally given a
lower-temperature decarburizing anneal after the final cold rolling. Carbon is not
necessarily removed to the same low level as in fully processed material. The
transformer manufacturer will subsequently stress relief anneal the material in a wet
decarburizing atmosphere to obtain additional decarburization and develop the
magnetic properties. Samples are taken after the mill decarburization anneal, cut into
specimens, decarburized at 843°C for at least one hour and tested to grade the coil.
 Semi processed CRGO Non Grain-oriented electrical steels are used for applications
in which the customer does the stress relief anneal. In general, such products have
good punching characteristics, and are used in a variety of applications including
small rotors, stators, and small power transformers. Semi processed electrical steels
can be purchased with a tightly adherent scale, or with an insulating coating over the
oxide. The organic coating acts as a lubricant during punching, but it does not
withstand stress relief annealing temperatures; therefore, it is not applied to semi-
processed material.

Important Electrical Properties of CRGO Cold Rolled Grain Oriented

Steel & Hi - B CRGO Grades

Core Loss details of popularly used CRGO steel Manufacturing mills of CRGO
Steel guarantee the core loss figure at flux density of 1.5 Tesla in case of CRGO
conventional grain oriented steel and at 1.7 Tesla in case of CRGO HI-B-Steel
and CRGO HI-B-LS Steel.

Thickness CRGO Grade Assumed Maximum Core Loss Minimum

Induction
at 800 A /
MM KG/DM3 At 1.5T At 1.7T mT

0.23 23ZDKH90 7.65 0.9 1.88

0.23 23ZH90 0.9 1.88
-0.009
23ZH95 0.95 1.88

Page | 52
 M-0H 1 1.88
M-1 7.65 0.71 1.06 1.8
M-2 0.75 1.12 1.8
M-3 0.79 1.04 1.8
0.27 27ZDKH95 7.65 0.95 1.88
-0.0106
27ZH95 0.95 1.88
27ZH100 1 1.8
M-0H 1.03 1.88
M-1H 7.65 1.09 1.88
M-3 0.83 1.21 1.8
M-4 0.89 1.27 1.8
0.3 30ZH100 1 1.88
-0.0118
M-0H 1.05 1.88
M-1H 1.11 1.88
M-2H 7.65 1.17 1.88
M-3 0.85 1.23 1.8
M-4 0.9 1.32 1.8
M-5 0.97 1.39 1.8
M-1H 1.16 1.88
M-2H 1.16 1.88
M-3H 1.28 1.88
M-5 1.01 1.45 1.8
M-6 1.11 1.57 1.8

Important physical properties of CRGO

Density gm/c3 7.65

Silicon content % 3.10

Resistivity micro Ohm-centimeter 48.00

Ultimate Tensile Strength 0° to Rolling Direction Kg/mm2 32.60

Page | 53
Ultimate Tensile Strength 90° to Rolling Direction Kg/mm2 38.20

Stacking factor % M4 (.27 mm) 96.00

Stacking factor % M5 (.30 mm) 96.50

Stacking factor % M6 (.35 mm) 97.00

DIMENSIONS AND TOLERANCES OF CRGO

0.18 mm (0.0071 in.)

0.20 mm (0.0079 in.), 0.23 mm

(0.0091 in.)
Thickness
0.27 mm (0.0106 in.), 0.30 mm
(0.0118 in.)
CRGO
COILS 0.35 mm (0.0138 in.)

914 mm (36 in.), and 1000 mm (39 in.)

Width
(Standard width available with
From 50 mm (2 in.), to 1.050mm (41
range)
in.)

Inside Coil Diameter 508 mm (20 in.)

0.30 mm (0.0118 in.), 0.35 mm

Thickness
(0.0138 in.)

Sheets Width 914 mm (36 in.), and 1000 mm (39 in.)

Length will be available according to

Length
negotiation

Page | 54
CRGO Tolerances in Dimensions & Shape of CRGO

TOLERANCE

Width Deviation of
Thickness mm Camber in any
mm thickness in
Width 2 metres Shear Burr
Thickness mm transverse
mm (Slit Products) mm
direction
mm
mm

0.18 +0.02
0.20 +0.02
150 0.23 +0.02
0.02 or under +0.20
or under 0.27 +0.03
0.30 +0.03
0.35 +0.03

0.18
+0.02 +0.02
0.20
over +0.02
0.23 0.02
150 +0.03 +0.30
0.27 or under
to 400 +0.03
0.30
+0.03
0.35
0.04
1.0 or under
or under
0.18 +0.02
0.20 +0.02
over
0.23 +0.02 0.03
400 +0.50
0.27 +0.03 or under
to 750
0.30 +0.03
0.35 +0.03

0.18 +0.02
0.20 +0.02
over 0.23 +0.02 0.03 +0.6
750 0.27 +0.03 or under 0
0.30 +0.03
0.35 +0.03

Page | 55
Note: Stipulation of camber shall be applied only for the steel strips (width 75mm over).

Besides the Watt Losses at specific flux densities of 1.5 T and 1.7 T CRGO manufacturers also
give curves of indicating Watt Losses ad A.C. Magnetization at various flux densities. These
curves are of immense help to Transformer designers, and available on request.

Conventional CRGO materials (M4, M5, and M6) are used regularly for cores in
Transformers. However recently due to environmental protection, energy savings are becoming
a very important factor and minimizing care loss in Transformers is becoming a must. Nippon
Steel Corporation has come out with low loss Hi-B materials, which guarantee low Watt
Losses at 1.5 Tesla flux density. Such materials are called Hi-B materials.

Table 3 gives magnetic properties of Hi-B material. Popular Hi-B grades used in India are 23
MOH & 27 MOH Watt.

Hi - B CRGO MATERIALS :

Core Loss Lamination Factor

Thickness
Max. Typical Typical Typical
Grade

W W W W
mm mil W (W/Kg) B (T) %
(W/Kg) (W/Kg) (W/Kg) (W/Kg)

23ZDKH85 0.85 0.57 0.78 0.34 0.46 1.91

97.5
23ZDKH90 0.90 0.58 0.80 0.35 0.48 1.91
0.23 9
23ZDMH85 0.85 0.57 0.78 0.34 0.46 1.91
97.4
23ZDMH90 0.90 0.59 0.81 0.35 0.48 1.91

Page | 56
 23ZH90 0.90 0.63 0.87 0.37 0.51 1.92

23ZH95 0.95 0.64 0.90 0.38 0.53 1.92 97.7

23M-OH 1.00 0.66 0.93 0.39 0.54 1.92

27ZDKH90 0.90 0.62 0.84 0.38 0.53 1.92

98.0
27ZDKH95 0.95 0.65 0.88 0.39 0.52 1.91

27ZDMH90 0.90 0.62 0.84 0.38 0.53 1.91

97.9
0.27 11 27ZDMH95 0.95 0.65 0.88 0.39 0.53 1.91

27ZH95 0.95 0.69 0.93 0.41 0.55 1.91

27M-OH 1.03 0.72 0.99 0.43 0.59 1.91 98.1

27M-1H 1.09 0.74 1.03 0.44 0.61 1.91

30ZH100 1.00 0.73 0.98 0.44 0.58 1.92

0.30 12 98.3
30M-OH 1.05 0.74 1.01 0.44 0.60 1.91

0.35 11 35M-1H 1.16 0.85 1.13 0.52 0.68 1.92 98.5

Page | 57
PRODUCTION
OF
STEEL

Page | 58
 OVERVIEW

The steel industry is a dynamic, innovative sector, which is constantly adapting and
refining itself to become more competitive in the market. The industry does this by developing
new, improved steel grades and production procedures that produce better and more cost
effective product lines for the changing marketplace. Today developing countries lead the
growth in world steel demand. Steel is a key material in promoting economic growth as it is
critical in the creation of infrastructure, construction materials, building, transport, machinery,
and consumer goods.

World Steel Production 2007 and 2008

The use of steel in the world economy continues to increase at a rapid pace because it is

a commodity that is both versatile and recyclable.

 In 2007, the world steel industry produced 1.3 billion metric tons of steel. The
International Iron and Steel Institute (IISI- the world’s largest steel organization with
membership of sixty-six countries) reported that the total global crude steel production
for the first half of 2008 was 696 million metric tons, a rise of 5.7% over the same period
in 2007. In the first six months of 2008, China produced 263.2 mmt of crude steel, an
increase of 9.6% compared to the same period in 2007.

 Asia produced 68.3 mmt of crude steel in June 2008 compared to 62.8 mmt in

June 2007, an 8.7% increase in crude steel production.

Page | 59
  Total crude steel production in the EU was 18.1 mmt, 1.8% higher than for June 2007.
The largest producer in the EU is Germany, with 4.1 mmt of crude steel, an increase of
2.1% compared to the same month last year.
 The ‘Other Europe’ region of seven countries outside the EU produced 2.9 mmt in June
2008, an increase of 15.5% from June 2007. Turkey’s crude steel production was 2.5
mmt, which was 17.5% higher than the same month last year. Turkey produced 10.6%
more crude steel in the first six months of 2008 than over the same period last year.

 Since 2000, steel’s average growth rate has been over 6% per annum.

It is projected that with the economic development of China and India, as well as, the
continued growth of Southeast Asia, steel will be in great demand for years to come.

WORLD STEEL PRODUCTION IN RECENT YEARS: (000 TONS)

1600000

1351289
1400000 1329719
1251196
1200000 1146686
1069082

1000000 969992
904053
788969 850345 WORLD
777328 847670
800000 ASIA
EUROPEAN UNION
600000 NORTH AMERICA

400000

200000

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Page | 60
WORLD STEEL PRODUCTION ,YEAR2007,in MILLION TONS
COUNTRY PRODUCTION

WORLD 1343.5

EU 210.3

CHINA 489.0

JAPAN 120.2

USA 97.2

RUSSIA 72.2

INDIA 53.1

SOUTH KOREA 51.4

GERMANY 48.4

UKRAINE 42.8

BRAZIL 33.8

Page | 61
WORLD STEEL REVIEW, May 2009
CURRENT SCENARIO OF CRUDE STEEL PRODUCTION IN THE WORLD (A
COMPARISON BETWEEN MARCH 2008 AND MARCH 2009 PRODUCTION OF STEEL)

120000
100000
80000
60000
40000
Mar-09
20000
Mar-08
0

 World production of crude steel in March 2009 fell by 23.5% to 91.7 million tonnes,
although this was a higher monthly total than the previous 4 months. The total of the 3
months to date was 263.7 million tonnes, 22.8% lower than the January to March period
in 2008. However, excluding China, the total for the quarter was 37% less than Q1 2008,
with the monthly total down 37.6%. All regions show a fall in crude steel production.

Crude steel production in the European Union 27 fell by 45.3% in March to 10.3
million tonnes compared to March 2008, and was 43.8% down in the quarter at 30.2
million tonnes.
 German steel production was 50% down in March, and 39.4% down in the three months
to 7.3 million tonnes.
 Italian production decreased by 42.7% in March, and by 40.9% in the quarter to 4.9
million tonnes.

Page | 62
 French steel production dropped by 36.7% in March, bringing the year to date total down
39.7% to 2.9 million tonnes.
 Spanish steel production decreased by 41.2% in March, and by 42.7% in the three months
to 2.8 million tonnes.
 UK steel production showed a drop of 43% in March, and 43.7% in the year to date to 2.1
million tonnes.
 Romania showed the largest fall at 67.8% in the month and 66.3% in the quarter;
 with Belgian production down 60.2% in the month, and 72% in the quarter.

According to ACEA, the European vehicle manufacturers association, car

registrations in the 28 European countries monitored fell by 9% in March, and by
17.2% in the first three months of 2009 compared to 2008.
 In Germany, presumably due to the car scrapping incentive scheme, there was an increase
in registrations of 40% in March, pushing the three month total up 18% to 868 thousand
units. Italian registrations were flat in March, with the quarter total down by 19% to 539
thousand Units
 French registrations showed an increase of 8% in the month, although the year to date
total was down by 3.9% to 505 thousand units.
 UK registrations dropped by 30.5% in March, bringing the year to date total down 29.7%
to 480 thousand units.
 In Spain registrations showed a large drop of 38.7% in March, bringing the quarter total
down 43% to 198 thousand units.
 In Poland, the largest of the East European countries, registrations rose by 2.5% in
March, and by 1.3% in the three months to 88 thousand units. However, Romania's three
month total was down 60.7%. In the former USSR, Russia showed a decrease in steel
production of 30.9% in the month and 33% in the quarter to 12.9 million tonnes.
 In the Ukraine production fell by 38.5% in March, and by 37.9% in the quarter to 6.8
million tonnes.
 Production in Kazakhstan showed a 22.6% drop in March, with the three months total
down by 20% to 865 thousand tonnes. While exports from both Russia and Ukraine in the

Page | 63
 first two months of 2009 were down, 19.2% for Russia and 24.7% for the Ukraine,
monthly exports have actually picked up from the low point in November 2008. Semis
accounted for just under half of Russia's exports in 2009, and just over half of Ukraine's
exports.

Crude steel production in the USA was just 4.1 million tonnes in March, a decrease
of 52.7%, bringing the first quarter total up 52.5% to 12.1 million tonnes.
 Mexican production fell by 51.2% in the month, with the three months total down 49.1%
to 2.4 million tonnes.
 Canadian steel production dropped by 55% in March and by 55.4% in the year to date to
1.9 million tonnes. US imports of steel in February dropped to their lowest level since
October 1995 at just under 1.5 million tonnes. Seamless and welded tubes in particular
showed a sharp drop compared to recent months. Imports of semis have also dropped off
markedly. US exports have also fallen significantly, down 34% to 613 thousand tonnes
compared to February 2008, and the lowest monthly export total since September 2004.
74% of exports went to Canada and Mexico with a further 10% going to other Central
and South American countries, which is a similar percentage as in previous years.
 South America is dominated by Brazil where steel production decreased by 41.5% in
March with the year to date down 42% at 5.0 million tonnes.
 In Argentina production was 49.5% down in the month bringing the year to date to 798
thousand tonnes, a fall of 41.7% on the first quarter of 2008.
 Venezuelan steel production, on the other hand, actually rose by 63% in March, and by
19.6% in the three months to over 1.1 million tonnes.

In Africa, the South African three month total fell by 26.9% to 1.6 million tonnes, while
the Egyptian total fell 26.2% to 1.3 million tonnes.

 In the Middle East Iranian steel production rose by 14% in March, bringing the first
quarter total up 17.9% to 2.9 million tonnes, while Saudi Arabian steel production
decreased by 5.3% in March, bringing the three months total down 26.5% to 938
thousandtonnes.

Page | 64
 The five major Asian countries for which monthly crude steel production data are
available showed increased production in both March and the year to date except
for China.
 Chinese steel production was very slightly down in March at 45.1 million tonnes, while
the three months total rose by 1.4% to 127.4 million tonnes, 48% of the world total in
2009.
 Japan's production fell by 46.7% in March, with first quarter production down 42.9% to
17.6 million tonnes.
 Indian steel production in March was 7.5% lower, with the three months total down 7.9%
to 13.2 million tonnes.
 Production in South Korea decreased by 21.2% in March, with the year to date total
down 22.9% to 10.5 million tonnes.
 Taiwanese production fell by 21% in the month, bringing the first quarter total to 4.2
million tonnes, a drop of 23.2% on January to March 2008.
Chinese exports of steel actually rose slightly in March to 1.6 million tonnes, although
this was still below the January total of 1.9 million tonnes. Imports, however, jumped to
over 1.7 million tonnes, the highest monthly total since March 2006, and making China's
balance of trade negative for the first time since November 2005. The large rise in
imports was due in part to the jump in the imports of semis, 465 thousand tonnes, which
was almost double the amount imported in the whole of 2008. Some 900 thousand tonnes
of semis were imported in the first three months of 2009 of which 91% were low carbon
billets and slabs. They came primarily from Russia, Taiwan, South Korea and Mexico,
which together accounted for 80% of the total. Most Chinese imports rose in March
compared to February, with CR at 318 thousand tonnes and HR wide coil at 287 thousand
tonnes.

Japanese exports in March 2009 jumped by 38% to 2.5 million tonnes compared to
February 2009, although they were still a third down on the same month in 2008.

Page | 65
PRODUCTION OF HOT ROLLED PRODUCTS(major producers)

COUNTRY PRODUCTION

(000,TON)

WORLD 1320785

CHINA 561769

JAPAN 108203

USA 96263

RUSSIA 59375

SOUTH KOREA 54246

INDIA 54163

GERMANY 46823

UKRAINE 36168

ITALY 32925

BRAZIL 25850

Page | 66
PRODUCTION OF ELECTRICAL STEEL(MAJOR PRODUCER IN 2007) 000,TON

COUNTRY PRODUCTION

CHINA 4187

JAPAN 1924

SOUTH KOREA 910

RUSSIA 700

GERMANY 664

TAIWAN 533

AUSTRIA 304

FRANCE 270

SLOVAKIA 242

INDIA 166

Page | 67
 STEEL PRODUCTION IN INDIA

CRUDE STEEL: TRENDS IN PRODUCTION

 The Indian steel industry have entered into a new development stage from 2005-06,
riding high on the resurgent economy and rising demand for steel. Rapid rise in
production has resulted in India becoming the 5 th largest producer of steel.

 It has been estimated by certain major investment houses, such as Credit Suisse that,
India’s steel consumption will continue to grow at nearly 16% rate annually, till 2012,
fuelled by demand for construction projects worth US$ 1 trillion. The scope for raising
the total consumption of steel is huge, given that per capita steel consumption is only 40
kg compared to 150 kg across the world and 250 kg in China.

 The National Steel Policy has envisaged steel production to reach 110 million tonnes by
2019-20. However, based on the assessment of the current ongoing projects, both in
greenfield and brownfield, Ministry of Steel has projected that the steel capacity in the
county is likely to be 124.06 million tonnes by 2011-12. Further, based on the status of
MOUs signed by the private producers with the various State Governments, it is expected
that India’s steel capacity would be nearly 293 million tonne by 2020.

Production

Page | 68
  Steel industry was delicensed and decontrolled in 1991 & 1992 respectively.
 Today, India is the 7th largest crude steel producer of steel in the world.
 In 2007-08(Apri-June''07), production of Finished (Carbon) Steel was 12.088 million
tonnes(Prov).
 Production of Pig Iron in 2007-08(April-June'07) was 1.165 Million Tonnes (Prov).
 The share of Main Producers (i.e SAIL, RINL and TSL) and secondary producers in the
total production of Finished (Carbon) steel was 33% and 67% respectively during the
period 2007-08 (April-June, 2007).

Expansion in Capacity
The National Steel Policy 2005 had projected consumption to grow at 7% based on a GDP
growth rate of 7-7.5% and production of 110 million tonnes by 2019-2020. These estimates will
be largely exceeded and it is envisaged that in the next five years, demand will grow at a
considerably higher annual average rate of over 10% as compared to around 7% growth achieved
between 1991-92 and 2005-06. It has been assessed that, on a ‘most likely scenario’ basis, the
steel production capacity in the country by the year 2011-2012 will be nearly 124 million tones.

PRODUCTION OF CRUDE STEEL IN INDIA(MILLION TONS)

60 55
50
50 46
42
38.4
40
29.7 30.6
30 21.4 23.8
20 13 15.2
5.1 7.5
10 1.1 2.4
0
1950 1960 1970 1980 1990 1993 1995 1998 2000 2001 2004 2005 2006 2007 2008

SOURCE:MINISTRY OF STEEL REPORT

Page | 69
MAJOR STEEL PRODUCERS IN INDIA(CRUDE STEEL IN 2006-07) 000,TON

6000

5174
5000 4799

4067
4000
3497

3006
3000 2761
2643

2191
1990
2000 1869

1000 803
472 537 585

159 150
0

SOURCE:MINISTRY OF STEEL REPORT

Page | 70
PRODUCTION OF CR COIL, HR COIL, AND ELECTRICAL STEEL IN INDIA
(000,TON) YEAR 2006-07

PRODUCT PRODUCTION

H RCOILS/SKELPS/STRIPS 11181

C RCOILS/SHEETS/STRIPS 4322

GP/GCSHEETS 4391

ELECTRICAL SHEET 143

SOURCE:MINISTRY OF STEEL REPORT

RECENT SCENARIO OF STEEL PRODUCTION IN INDIA
000,ton

5000

4800

4600

4400

4200

4000

3800

3600
Jun-08 july aug sept oct nov dec jan feb march Apr-09

Page | 71
 Fig :fluctuating production in recent months

STEEL PRODUCERS IN INDIA

Traditionally, Indian steel industry were classified into Main Producers (SAIL plants, Tata Steel
and Vizag Steel/ RINL) and Secondary Producers. However, with the coming up of larger
capacity Steel making units, of different process routes, the classification has been charcterised
as Main Producers & Other Producers. Other Producers comprise of Major Producers namely
Essar Steel, JSW Steel and Ispat Industries as well as large number of Mini Steel Plants based on
Electric Furnaces & Energy Optimising Furnaces. Besides the steel producing units, there are a
large number of Sponge Iron Plants, Mini Blast Furnace units, Hot & Cold Rolling Mills &
Galvanising/ Colour Coating units which are spread across the different states of the country.

Indian Iron & Steel Makers

I Steel Producers
A. Main Producers
Steel Authority of India Ltd. (SAIL)
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Rashtriya Ispat Nigam Ltd.(RINL)

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TATA Steel Ltd.(TSL)

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B. Major Producers
JSW Steel Ltd.
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ESSAR Steel Ltd.

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Ispat Industries Ltd.

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Jindal Steel & Power Ltd.

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C. Other Producers (Mini Steel Plants)

EAF based Units : 33 working units
Industion Furnace based units : 970 working units
MBF-ETF based units : 2 units

II Sponge Iron Producers

A. Gas based Sponge Iron Units
ESSAR Steel Ltd.
Ispat Industries Ltd.
Vikram Ispat Ltd
B. Coal based Sponge Iron Units : 321 units

Page | 72
One of the costly and highly technical product manufactured is electrical steel. All the
major steel makers produce this variety of steel ,but there are many more small steel
makers which manufacture this steel.

FEW NAMES ARE:-

Pyramid power electronics Panchkula

Voltage stabilisers, transformer laminations & sheet metal cabinets.

Rajalakshmi stampings Bengalooru

Motor stampings & transformer laminations.

Runthala industries Jaipur

Distribution & power transformers (upto 1000KVA), transformer cores, transformer laminations
& m.s. Tanks.

Sai darshan electrical pvt. Ltd. Chennai

Toroidal cores for transformers & stabilizers, electrical transformer laminations, crgo/crngo e & i
laminations.

Sb electronic industries new Delhi

Transformer spare parts (clamps, bobbins, lamination etc.).

Sewa electrical industries pvt. Ltd. New delhi

Transfomer & motor laminations.

Shilchar electronics ltd. Vadodara

Telecommunication, power, electrical, isolating, toroidal & distribution transformers, cores,
laminations & bobbins.

Shreeji stampings Ahmedabad

Electric motors, submersible pump laminations transformer laminations.

Vardhman stampings pvt. Ltd. Ahmedabad

Transformer laminations & toroidal cores.

Vikarsh stampings india Pune

Electrical transformer cores, transformer laminations, transformer stampings, toroidal cores.

Page | 73
Vilas transcore Vadodara
Electrical laminations & toroidal cores.

Yam industries Bengalooru

Electrical laminations & stampings & transformer laminations.

Alfo electric Chennai

Key person:- s. Ponraj, mng. Partner. Year established:- 2008. No. Of employees:- 22. Mfrs.:- all
kinds of transformers from 1KVA to 1000 kva (air-cooled, current, isolation, step-down / step-
up, single-phase / three-phase & autotransformers.)

Amod stampings pvt. Ltd. Vadodara

Mfrs.:- laminations for distribution & power transformers upto 315MVA (upto 1000MM wide).
Toroidal wound cores, rectangular / round cores, cut / uncut cores, stepped / unstepped cores etc.

Fibro laminations Silvassa

Mfrs. & exprs. Of transformer parts, crgo cores & laminations for distribution & power
transformers upto 315MVA, toroidal cores, motor stampings, e & i laminations crgo/crngo in all
sizes,

Kryfs power components ltd. Mumbai

Iso-9001:2000 certified mfrs. & exprs. Of transformer laminations, transformer cores (upto
315MVA), toroidal cores, slit coils of crgo & crngo electrical steel. Also mfrs. Of twin path
synthetic slings, round slings, polyester webbing slings, lifts

Nexus group Chennai

Year established:1994. No. Of employees: 30. Annual production capacity: 7200 mt''s. 1) mfrs.
& exprs.:- transformer laminations & cores. Suitable for 25 kva upto 160 mva power
transformers. 2) mfrs.:- transformers like distribution, dry type,

Amod stampings pvt. Ltd. Vadodara

Mfrs.:- laminations for distribution & power transformers upto 315MVA (upto 1000MM wide).
Toroidal wound cores, rectangular / round cores, cut / uncut cores, stepped / unstepped cores etc.

Asra stampings pvt. Ltd. Hyderabad

Established in 1989. Mfrs.:- electrical stampings for ceiling & table fans, submersible pumps
etc., sheet metal components / sub-assemblies; ceiling fans.

Page | 74
Auric engineering pvt. Ltd. Hyderabad
Electrical stampings & laminations, sheet metal parts & press components, plastic film
capacitors from 1 to 144 mfd & l.t. Shunt power capacitors from 1 to 25 kvar,isi marked ceiling
& table fans. Trading in starting capacitors,kvars,crr steel &

Auro stampings pvt. Ltd. Vadodara

Mfrs. Of transformer laminations for distribution & power transformers upto 315 mva, stampings
for rotating machines, torroidal wound cores, rectangular, round cut cores, e-i sections -
crgo/crngo in all standard

Be-tech (india) Mumbai

Mfrs.:- all types of transformers (current, frequency, isolating, power, single-phase, fire resistant,
furnace, dry-type, custom, instrument, high / medium voltage), servo controlled voltage
stabilisers, transformer cores, transformer chokes,

Cassettes & electronics Chennai

Year established:- 1993. No. Of employees: 5. Mfrs.:- e&i, strip lamination cores in crgo/crngo,
transformer bobbins, clamps, lamination cores, relays, abc plastic stabilizers & box, choke box,
ups front panels, adoptor box, emergency light

Dolmax exim (chennai) pvt. Ltd. Chennai

Year established:2002. No. Of employees:8. Business areas: imports to india, exports from
india,third country import / export, project management & consultancy. The company handles
metal & metal scrap, machine tools, machinery, pallet mesh, pallet

Ganesh precision laminations Chennai

Motor stampings, alternators & laminations for transformers. Application of product :-
transformer & motor industry. Material of product:- crno & crgo materials.

Gkw ltd. Mumbai

Hss & cold work tool steel, electrical motor & fan stampings, transformer laminations, toroidal
cores, sheet metal components, press tools, jigs & fixtures, high tensile & steel bolts & nuts,
wood screws, self-tappers, tubular rivets & safety

Poggen-amp nagarsheth powertronics pvt. Ltd. Ahmedabad

Mfrs.:- electrical laminations for static & rotating machines viz. Transformers, ups, battery
charges, rectifiers, contactors, energy meters, induction motors, single phase motors, dc motors,
traction motors, servo motors, generators, wind

Page | 75
Power batteries Indore

Distribution & power transformers upto 5 mva & 33 kv, lamination / crgo for ct/pt,
distribution & power transformers of all thickness & grades. E & i of all sizes.

Pushpak metals Ahmedabad

Transformaer laminations, electrical stampings (strips m6 m5 m4). Application:- manufacturing
stabilizers, welding transformers, induction furnaces & electrical equipment.

Sine wave electronics Rewa

Wound ring/rectangular transformer cores, miniature metering cores, split cores, transformer
laminations (upto 315 mva), magnetic shunt assemblies for power transformers

Surya laminations pvt. Ltd. Vadodara

Mfrs. & exprs. Of transformer laminations for distribution & power transformers

Tristar engineers Pune

Year established:- 1996. Additional contact person:- mr. Laxmikant trivedi, mr. Sameer shinde.
Annual production capacity:- 600 tonnes. Mfrs. Of all types of transformer laminations,
distribution, power transformer upto 10MVA. Toroidal cores,

Adair stampings pvt. Ltd. Mumbai

Electrical stampings & laminations.

Crompton greaves ltd. Mumbai

Electrical stamping & laminations for motors, alternators, generators, fans etc.

Kapsons industries ltd. Jalandhar

Electrical stampings & laminations, aluminium pressure die cast components.

National electronics corporation Kanpur

Chassis, transformers, stabilisers, battery chargers, ups systems, emergency lights.

National lamination industries Mumbai

Transformer cores & laminations.

Page | 76
 PRICE
ANALYSIS

Page | 77
Steel Product Price Levels across 2008 – 2009
Current prices & historic pricing levels.
World Carbon Steel Transaction Prices
Hot Cold
World Steel Prices Hot Rolled Steel Wire Medium Steel
Rolled Rolled
US $/tonne Steel Coil Rod Sections
Steel Plate Steel Coil

Jan 2008 639 847 716 621 871

Feb 2008 699 887 772 687 905

Mar 2008 800 978 890 758 970

Apr 2008 915 1065 985 852 1042

May 2008 998 1160 1080 920 1105

Jun 2008 1073 1225 1144 1005 1184

Jul 2008 1099 1307 1186 1067 1234

Aug 2008 1093 1300 1179 1062 1227

Sep 2008 973 1243 1046 977 1154

Oct 2008 865 1150 940 811 1045

Nov 2008 716 1000 802 676 898

Dec 2008 565 901 659 609 780

Jan 2009 575 806 666 626 791

All steel prices above are in US $/metric tonne. Steel price information last updated on 30th Apr 2009.
Source: MEPS Steel Prices On-line.

Page | 78
PRICE COMPARISON OF FLAT PRODUCTS(PRICES IN US$/TON)

1600

1400

1200

1000

EU
800 N.AMERICA
WORLD
ASIA
600

400

200

0
May-08 JUNE JULY AUG SEPT OCT NOV DEC Jan-09

SOURCE :MEPS STEEL PRICES

Page | 79
ASIAN CARBON STEEL PRICE INDEX - WITH INDIVIDUAL PRODUCT FORECASTS

(Based on US$/tonne values)

JAN 1997 = 100

300

250

200

150
HR COIL
CR COIL

100

50

SOURCE:MEPS STEEL PRICES

Page | 80
COST OF PRODUCTION OF HRB(US$/METRIC TON)
367

370

355

343

343

329

313

271

252
USA Europe Japan S KoreaGlobal Avg China India CIS Brazil

SOURCE:TATA STEEL PRESENTATION

From the above figure it can be said that developing countries like China,India,Brazil and

Other coundries of central Asia are in favourable condition to produce and export steel. in fact

These countries are called BRIC(BRAZIL,RUSSIA,INDIA,CHINA) countries in business world.

Page | 81
PRICE OF STEEL IN INDIA

April2008
(RS/TON)

ITEM KOLKATA DELHI MUMBAI CHENNAI

PIG IRON 31825 34500 36500 35350

HR COIL(2 MM) 47300 49000 48450 47850

HR 44950 48000 48450 45775

COIL(3.15MM)

CR 49000 52000 52000 52000

COIL(0.63MM)

CR
48750 51000 51000 51475
COIL(1.0 MM)

SOURCE:JPC

Page | 82
TRADING OF
STEEL

Page | 83
CONSUMPTION OF STEEL
India is the fifth-largest consumer of steel in the world. It consumes about 1.5 MT of stainless
steel a year with around 70 per cent accounting for kitchenware. However, its use in railway
coaches, wagons, airports, hotels and retail stores is growing immensely. Demand for steel in
India is likely to grow at around 12 per cent against the global average of 5–6 per cent. Steel
consumption grew at 3.8 per cent in the January-March quarter of 2008-09 over the same period
last year.

A Credit Suisse Group study states that India's steel consumption will continue to grow by 16 per
cent annually till 2012, fuelled by demand for construction projects worth US$ 1 trillion. The
scope for raising the total consumption of steel is huge, given that per capita steel consumption is
only 35 kg – compared to 150 kg across the world and 250 kg in China.

in the following table it’s clear that how much steel is needed to import to fulfil the domestic
demand

(million tons) 20003-04 2004-05 2005-06 2006-07 2007-08april

dec

production 40.709 43.513 46.566 52.529 40.117

consumption 33.119 36.377 41.433 46.783 36.992

import 1.753 2.293 4.305 4.927 5.325

export 5.207 4.705 4.801 5.242 3.850

SOURCE:MINISTRY OF STEEL REPORT

CONSUMPTION OF STEEL (sector wise and product wise)

Major consumers of steels are

Automotive sector

Infrastructure

Power sector

White goods

Page | 84
THE FOLLOWING PIE DIAGRAM SHOWS THE CONSUMPTION OF STEEL IN DIFFERENT
SECTORS

Financial year 06-07

cosumption(million ton)

5
1.7

construction
2.7
cap goods

3.7 21 auto
packaging
other

THE FOLLOWING PIE CHART SHOWS THE CONSUMPTION OF DIFFERENT ITEMS OF

FINISHED STEEL

3 CONSUMPTION(MILLION TON)
HR
6 10 CR
28
BARS AND ROD
GALVANISED PRODUCT
12
43 STRUCTURALS
RAILS

Page | 85
DEMAND OF STEEL(SECTORAL CONSUMPTION EFFECT)

Investment in construction sector (Rs m)

2500

2000

1500

1000

500

0
FY'03 FY'04 FY'05 FY'06 FY'07 FY'08 FY'09 FY'10
E E E E E

Page | 86
 STEEL DEMAND FOR POWER SECTOR

1200

1000
Incremental Consumption in '000

800

600

400
tons

200

0
'04 '06E '08E '10E '12E

Based on above shown datas we can estimate the future demand of steel in india.

In the figure shown below demand for flat and long products been shown.

(ALL FIGURES IN MILLION TON)

ADC : INDIA (till FY-12)

70 65.0
56.9
60 51.1
30.0

50
26.2

36.9
23.5

40 31.2 34.1
26.7 28.8
16.5
15.0

30
13.2
16.9 11.9
15.8 10.9

35.0

20
30.7
27.6
20.4
19.2
18.0

10
0
FY03 FY04 FY05 FY06 FY07 Pess. Most Opt.
Likely
FLAT LONG Page | 87
DEMAND SUPPLY SCENARIO

Over the past ten years India’s crude steel output rose nearly 7%per year to 55.3 million tons ,
while global crude steel output increased by 4% (Germany managed an increase of just under
1%p.a.) Although India is the world’s eighth largest steel producer, its3%-plus share of global
steel output is still very low; it is roughly the same as Ukraine’s share of world steel production.
China, the world’s biggest steelmaker, produces nearly ten times as much as India.In 2005
India’s crude steel output of 46.5 million tons was 8%higher than in 2004; only in China was the
growth rate considerably higher at 15%. By contrast, production volumes fell in the US and the
EU-25 by nearly 5% and roughly 4% respectively. In the first five months of 2006 Indian steel
production continued to expand unabated, rising 10% yoy.

There may be significant increase in output by the Indian steel industry over the medium term.
The entire industry’s contribution to gross domestic productshould rise in the coming years to
more than 30% – compared to just under 27% at present. The growth drivers are the expanding
client industries Automotive engineering (production up 16% p.a. between 2000 and 2005),
mechanical engineering (up 10% p.a.) and construction (up 6% p.a.).

60

50

40

30 SUPPLY(mt)
GROWTH
20

10

0
2001 2002 2003 2004 2005 2006 2007

FIG:Demand and supply of steel

Page | 88
Even though India is now one of the world’s top ten steelmakers its domestic output is
insufficient to meet the demand in all segments. In 2005, some 4.7 million tons of steel were
imported, compared with only 2.2 million ten years earlier (an annual increase of 8%). The
growth in Indian import demand in 2005 of around 2 million tons is roughly equivalent to the
total annual output of Hungary. Low steel prices smooth the way for imports from Russia,
Ukraine and Kazakhstan. The geographical proximity of Japan, South Korea and China makes
them important suppliers as well. We do not expect India to be self-sufficient in many segments
over the medium term.
There are several reasons for this:
 Firstly, steel consumption is rising very fast as a consequence of the prospective dynamic
economic growth.
 Secondly, there is demand for high-quality products which India will not be able to
supply in sufficient quantities for the foreseeable future.
These include products with surface finishing that helps them to be more durable and retain their
value for longer. In general, the trend towards weight-optimized components persists; this
improves the prospects for Western European exporters in the Indian market. As a member of the
WTO (since 1995)India is obliged to gradually abolish import restrictions, so importing steel
should be far less problematic in future.

The Indian Steel Industry has withstood international competition despite the reduction of basic
customs duty on steel from 25-30% in 2002-03 to 5% in 2006-07. The industry now operates in
an open economy where exports and imports respond to increases or decreases in the domestic
demand driven primarily by market signals. While exports of finished steel were sustained at a
level of 4-5 million tonnes per annum during the 10th Plan, imports sharply increased from about
1.66 million tonnes in 2002-03 to 4.93 million tonnes in 2006-07 not because of fall in
competitiveness but to fill up supply-demand gap in the domestic market. In the current year,
production, consumption and exports of finished steel for the period April-December, 2007 grew
by 6.6%, 12.3% and 9.1% respectively as compared to the corresponding period of the previous
year. Imports of finished steel during the current year (April-December, 2007) were up by 68.7
% over the corresponding period of the previous year. The pace of consumption growth has thus
out paced production growth and the country has become a net importer of steel. These facts

Page | 89
indicate a healthy demand for steel in the domestic market which augurs well for the steel
industry especially at a time when new investments are lined up in the steel sector.

DUTY STRUCTURE

DUTY STRUCTURE AT A GLANCE (2008-09)

(Revised on 24.12.2008)

Sr.No. Item CTH No. Custom Duty Custom Duty

2007-08 2008-09

1. Pig Iron 72.01 5% 5%

2. Semis 72.07 5% 5%

3. Bars & Rods 72.13 5% 5%

4. Structurals 72.16 5% 5%

5. HR Sheets/Plates 72.11 5% 5%

6. HR Coils 72.08 5% 5%

7. CR Coils/Sheets 72.09 5% 5%

8 GP/GC Sheets 72.10 5% 5%

9. HRGO/HRNGO 72.08 5% 5%
72.11

10. HR alloy steel (flat rolled) 72.25 5% 5%

72.26

11. Tinplates W/W and TFS seconds 72.10 10% 10%

72.12

12. Defectives/CR/ Coils 72.09 10% 10%

13. Stainless steel HR Coils for coin blanks 72.19 5% 5%

14. Melting Scrap 72.04 5% 0%^

15. Re-rollable scrap 72.07 5% 0%

16. Ships for breaking 89.08 5% 5%

17. Limestone Flux 25.21 15% 15%

18. Iron Ore 26.01 2% 2%

19. Coking Coal of ash content below 12% 27.01 0% 0%

Page | 90
 20. Coking Coal of ash content above 12% 0% 0%

21. Non-coking coal 27.01 5% 5%

22 Metcoke 27.04 5% 0%

SOURCE:MINISTRY OF STEELREPORT

IMPORT/EXPORT OF STEEL(2006-2007,000 TON)

CATEGORY IMPORT EXPORT

SEMIS FINISHED STEEL

SEMIS 268 665

REROLLABLE SCRAP 154.7

BAR AND RODS 290 329

STRUCTURALS 86 75

RLY MATERIALS 2.5

PLATES 1124.5 106

HR SHEETS 56.9

HR COILS/SKELPS/STRIPS 1571.7 1580

CR COILS/SHEETS 605.8 386

GP/GC SHEETS 195.2 2173

ELECTRICAL SHEETS 252.4 1.5

TMBP 1.8

TIN PLATES 124.1 37.0

TIN PLATES WASTE 25.0

TIN FREE STEEL 32

TOTAL FINISHED STEEL(NON 4368 4892

ALLOY)

Page | 91
TOTAL STEEL(NON ALLOY) 4791 5557

ALLOY/STAINLESS STEEL 503.6 349

TOTAL STEEL 5295

OTHER STEEL ITEM

PIPES AND FITTINGS 137

MISC. STEEL ITEMS 317

STEEL SCRAP 2185

IRON

PIG IRON 3.7 706

SPONGE IRON 0.1 55.6

H R IRON 105.9

GRAND TOTAL 8045.3

Page | 92
TOP 10 STEEL EXPORTING COUNTRIES

68546570
TONS
80000000

70000000

60000000

36245541

30307924

29868899

29624000
50000000

22126000
40000000

18936000

17907000

11102000

10844000
30000000

20000000

10000000

TOP 10 STEEL IMPORTING COUNTRIES

31359000

TONS
27424000

26426000

35000000
24582000

30000000
17823000

17364000

17318000

25000000
15020000

12063000

20000000
9802000

15000000

10000000

5000000

Page | 93
WORLD TRADE OF SOME STEEL PRODUCT
DESTINATION COUNTRIES

HOT ROLLED BAR AND FLATS

TONS
40000
35000
30000
25000
20000
15000
10000
5000
0

COLD ROLLED PLATES AND SHEETS

TONS
60000
49275
50000 39846
40000 33084
30000 21912
20000 15025 16294
10000 3854
0
SPAIN USA GERMANY BELGIUM INDIA PORTUGAL OTHER CIS

Page | 94
SILICON ELECTRICAL SHEET AND STRIP
4000 3753

3500

3000

2500

2000
GRAIN
1500 1185
NON GRAIN
1000
547 466
500 237 301 216 203
0 0 0 0 24 19 66 88
0

SOURCE COUNTRY
HOT ROLLED BAR AND FLATS

TONS
25000

19537
20000

15000

10000 8401

5030
5000 3456 3129
1807

0
S AFRICA ITALY SWEDEN TURKEY GERMANY CHINA

Page | 95
COLD ROLLED PLATE AND SHEETS

TONS
45000 42493
40000 36441
35000 30910
30000
25000
20000 16893
13961
15000
10000 7467
3597 4797
5000 1664 205
0

ELECTRICAL STEELSHEET AND STRIP

TONS
6000
5148
5000
4043
4000
3477 3450

3000 2568 2703

2440

2000

1000

0
CHINA JAPAN GERMANY FRANCE RUSSIA S KOREA USA

ALL DATA SOURCES ABOVE:www.worldsteel.org

Page | 96
TRADING OF STEEL IN INDIA

TRANSACTION PROCESS
1.Announcement of procurement plan

2.Introducing the products

3.Classification of products

4.Treatment of product

5.Application of tender

6.Selection of suppliers

7.Request for estimates

8.Submitting estimates

9.Fixing contract and prices

10.Delivery inspection and payment

Page | 97
 CORE-1, SCOPE COMPLEX,

7,Institutional Area, Lodi Road, New Delhi - 110003, India

Tel.No.011-24364107/24362200 Extn. 1300

Fax: 011- 24364502/24360368
E-mail : rchopra@mmtclimited.com
www.mmtclimited.com

No.MMTC/STEEL/PI/EXP/TENDER/02/2009 Date: 18.06.2009

SUB: LIMITED TENDER FOR EXPORT OF BASIC GRADE PIG IRON

FOR SHIPMENT DURING 1ST HALF OF JULY 2009 (DUE DATE 25TH
JUNE, 2009) (AT SELLERS OPTION).

1. MMTC INVITES OFFERS FOR EXPORT OF 2 LOTS OF PIG IRON

(GRADE N -1 ) (AT SELLERS OPTION) FOR SHIPMENT DURING 1ST
HALF OF JULY 2009 AS PER DETAILS BELOW:

I.) 1ST Lot : 30,000 MT +/-5% .

DETAILED CHEMISTRY ALONGWITH TERMS AND CONDITIONS ARE

AS FOLLOWS:-
i. MATERIAL: BASIC GRADE PIG IRON
ii. CHEMISTRY: C: 3.6 - 4.3%; Si : 1.24 % MAX;
Mn: 1.0% MAX; S: 0.05% MAX , P: % 0.15% MAX.
iii. SIZE: PIGS UPTO 20 KGS IN WEIGHT. CHIPS BELOW 25
MM NOT EXCEEDING 5%.
 II.) 2ND LOT 10,000 – 30,000 MT +/-5%.

DETAILED CHEMISTRYAS FOLLOWS:

i. MATERIAL: BASIC GRADE PIG IRON

ii. CHEMISTRY: C: 3.6 - 4.3%; Si : 1.24 % MAX;
Mn: 1.0% MAX; S: 0.05% MAX, P: 0.10% MAX.
iv. SIZE: PIGS UPTO 20 KGS IN WEIGHT. CHIPS BELOW 25
MM NOT EXCEEDING 5%.

DUST, DIRT AND MOISTURE EXCEEDING 0.5% DEDUCITIBLE FROM

DRAFT SURVEY WEIGHT.

BIDDER MAY QUOTE FOR ONE OR BOTH LOTS SEPERATELY

INDICATING SPECIFIC LOT, QUANTITY AND UNIT PRICE.

EMD : ALL BIDDERS ( EXCEPT MTPL WHICH IS A 100% SUBSIDIARY

OF MMTC ) ARE REQUIRED TO SUBMIT EMD @ US$ 1 PMT BY WAY OF
DD OR BG(PROFORMA ENCLOSED) THROUGH A SCHEDULED
COMMERCIAL BANK AT NEW DELHI. OFFER WITHOUT PROPER B.G.
OR D.D. WILL NOT BE CONSIDERED.

THOSE WHO HAVE ALREADY SUBMITTED BG FOR ONE YEAR MAY

IGNORE SUBMISSION OF EMD. HOWEVER, IF THE SAME BIDDER
QUOTES FOR 2ND LOT ALSO, THEY WILL SUBMIT ADDITONAL BG FOR
THE QUANTITY TENDERED OF THE 2ND LOT @ USD 1/PMT.

BG MUST BE VALID UPTO AUGUST 2009 AND WILL BE RETURNED

TO SUCCESSFUL BIDDERS ONLY AFTER SATISFACTORY
PERFORMANCE OF THE CONTRACT.

2. PAYMENT TERMS : BY IRREVOCABLE L/C PAYABLE ON

PRESENTATION OF DOCUMENTS TO THE NEGOTIATING BANK WITH
TT REIMURSEMENT CLAUSE AND RED CLAUSE OPENED BY A FIRST
CLASS INTERNATIONAL BANK AS PER THE STANDARD FORMAT OF
MMTC (ENCLOSED). LC SHALL BE OPENED WITHIN TEN (10)
 WORKING DAYS FROM THE DATE OF LETTER OF INTENT (LOI) BUT
BEFORE NOMINATION OF VESSEL WHICHEVER IS EARLIER, FAILING
WHICH EMD WILL BE FORFIETED AND MMTC MAY TAKE ACTION AS
DEEMED FIT. LC IS REQUIRED TO BE CONFIRMED AT THE COST OF
OPENERS, BY ANY SCHEDULED COMMERCIAL BANK.

3. FOR THE BIDS SUBMITTED BY AGENTS/REPRESENTATIVES, THE

NAME OF THEIR PRINCIPALS IS TO BE FURNISHED ALONGWITH A
LETTER OF AUTHORITY ISSUED BY THEIR PRINCIPALS AUTHORISING
THE AGENTS/REPRESENTATIVES TO PARTICIPATE ON THEIR
BEHALF.

4. CONTRACT : WRITTEN CONTRACT SHALL BE REQUIRED TO BE

SIGNED BY THE SUCCESSFUL BIDDER (PARTY) WITHIN FIVE (5)
DAYS OF LOI. THE SAME PARTY SHALL OPEN LC WITHIN THE
STIPULATED TIME FRAME AS DETAILED IN PARA 2. SHIPPING
DOCUMENTS WILL BE MADE ONLY IN THE NAME OF THE PARTY
WHO OPENS LC.

5. PRICE PER METRIC TONNE ON FOB PARADIP PORT TO BE QUOTED IN

US DOLLARS. ALL OTHER TERMS AND CONDITIONS WILL BE AS PER
THE STANDARD TERMS AND CONDITIONS OF MMTC, WHICH ARE
AVAILABLE ON OUR WEBSITE.

6. ALL BIDS SHALL BE FURNISHED IN SEALED COVERS IN 2 PARTS I.E.

PART 'A' AND PART 'B' SEPARATELY ADDRESSED TO 'CGM (STEEL),
MMTC LTD., 3RD FLOOR, CORE - 1, SCOPE COMPLEX, 7-
INSTITUTIONAL AREA, LODHI ROAD, NEW DELHI - 110 003.

7. PART 'A' : TECHNO - COMMERCIAL TERMS IN A SEPARATE SEALED

COVER SUPERSCRIBING "COMMERCIAL TERMS & CONDITIONS"
CONFIRMING THAT THE BID IS STRICTLY AS PER TERMS OF TENDER
ENQUIRY. B.G. OR D.D. TOWARDS EMD TO BE SUBMITTED
ALONGWITH TECHNICAL BID AND IF THE SAME IS NOT ENCLOSED,
SUCH BIDS WILL BE REJECTED.
 IN NO CASE PRICE OFFERED SHOULD BE MENTIONED IN THE
TECHNO-COMMERCIAL BID. IF OFFERED, SUCH BIDS WILL BE
REJECTED.

PART 'B' : PRICE BID LOT WISE IN ANOTHER SEALED COVER

SUPERSCRIBING "PRICE BID". PRICE BIDS OF BIDDERS WHOSE
TECHNO-COMMERCIAL BIDS ALONGWITH EMD ARE ACCEPTABLE
WILL ONLY BE OPENED FOR FURTHER CONSIDERATION.

8. SEALED BIDS SHOULD BE DROPPED INTO A TENDER BOX KEPT IN

THE OFFICE OF CGM (STEEL) BEFORE 1200 HRS (IST) ON 25TH JUNE,
2009 (25.06.2009) LATE BIDS OR BIDS WITH INADEQUATE DETAILS
SHALL NOT BE CONSIDERED. THE TECHNICAL BIDS WILL BE
OPENED AT 1230 HRS.(IST) ON 25TH JUNE, 2009.

9. OFFERS SHALL BE VALID TILL 1730 HRS (IST) OF 26TH JUNE, 2009.

10. OFFER IS LIABLE TO BE REJECTED IN CASE IT IS CONDITIONAL OR

WITH ANY DEVIATIONS TO OUR TENDER TERMS.

11. MMTC RESERVES THE RIGHT TO ACCEPT OR REJECT ANY OR ALL

BIDS OR CANCEL THE TENDER WITHOUT ASSIGNING ANY REASON
AND THE DECISION OF MMTC IN THIS REGARD WILL BE FINAL AND
BINDING.

GENERAL MANAGER (STEEL)

18.06.2009
 ANNEXURE - I
No.MMTC/STEEL/PI/EXP/TENDER/02/2009 Date: 18.06.2009

TERMS AND CONDITIONS FOR AGREEMENT FOR SALE BY MMTC

FOR EXPORTS OF IRON AND STEEL PRODUCTS ON FOB ST BASIS

1.0 MMTC Ltd, a Company incorporated in India under the Companies Act 1956 having its
registered Office at Scope Complex, Core 1, 7-Institutional Area, New Delhi herein after referred
to as "SELLER" (which term or ex-pression unless excluded by or repugnant to the context shall
include its successor and permitted assignee) is the SELLER.
1.1 The SELLER is an independent legal entity with power and authority to enter into contracts
solely in its own behalf under applicable Laws of India and general principles of contract Laws.
Government of India is not a party to any agreement as per these terms and conditions and is not
and shall not be liable for any acts, omissions, commissions breaches or other wrongs arising out
of any agreement as per these terms and conditions and the BUYER shall waive, release and
forego any and all actions for claims including loss claims, impleads claims or counter claims
against Government of India arising out of this contract and shall not sue the Government of India
as to any manner, cause of action or thing whatsoever arising of or under this agreement.
2.0 The Person/Company/Firm identified as BUYER in the agreement including his/its successor/
permitted assignee shall be herein after referred to as "BUYER".
2.1 The obligations in the agreement are between BUYER and SELLER and unless otherwise
agreed any BUYER's representative in India is not liable or obliged by/to SELLER under any
agreement as per these terms and conditions except that any communication to/ from such
representative shall be deemed to be to/ from BUYER.

3.0 PRICE BASIS:

3.1 Unless otherwise agreed, price of the material shall be free on board (stowed), Paradip Port,
India.
3.2 SELLER shall under no circumstances be liable for any costs/ charges/ liabilities/ insurance/
freight/ taxes or duties/ levies/ fees whatsoever nature, including by reason of importation of the
material in the country of import, arising subsequent to the delivery of the materials as per the
agreement on the basis of FOBST.
3.3 Marine Insurance to be covered by the BUYER.
4.0 MATERIAL & QUANTITY:

4.1 Subject to these terms and conditions (and expressly agreed deviations/ deletions/ additions if
any), the SELLER is obliged to sell material of technical specifications as agreed and the BUYER
is obliged to buy the same.
4.2 Unless otherwise agreed, the tolerance on quantity to be delivered shall be +/- 5 % at Vessel
Master's option for balancing of ship. The BUYER shall nominate vessel for shipping quantity as
per LOI. Weight (quantity) shall be established by draft survey at loading port by an independent
inspection agency, and the quantity and quality established at load port shall be final. Weight of
deleterious impurities such as nonferrous dirt, dust, moisture over 0.5% (half percent), shall be
deductible from the final weight. BUYERS have freedom to nominate their own agency at
BUYER's cost to co-jointly carryout out quality and quantity survey with the independent
inspection agency appointed by the SELLER, and the inspection is to be carried out in accordance
with international standards applicable for pig iron for quality inspection and draft survey.
4.3 The cost of inspection by the independent inspection agency appointed by the SELLER, shall
be borne by the SELLER. The inspection certificate issued by them shall certify, inter-alia, that
the materials were inspected at the loading port prior to loading and that the marking were as per
requirements of the Agreement between the SELLER and the BUYER.

5.0 DELIVERY/ SHIPMENT:

5.1 The SELLER shall deliver the Materials free in the holds of the vessel(s) nominated by
BUYER and accepted by the SELLER as per these terms and conditions in one or more safe
berths reachable on arrival always afloat at loading port which shall be Paradip, India. Unless
financial arrangement is made by the BUYER as per clause 6 below or otherwise as agreed by
SELLER, the SELLER is not obliged to confirm delivery.
5.2 The BUYER shall nominate a vessel not more than 25 years old with lay date/ cancellation
date within 15 days of SELLER's notice of readiness of materials for shipment or within the lay
days in case given by the SELLER or acceptable to the SELLER whichever is earlier. The
BUYER shall take into account limitations of the port such as, maximum LOA of 225 m,
maximum beam length of 34 M and maximum laden draught of vessels as 12.5 m. However,
vessel acceptance shall be given only after acceptance of vessel by Port Authorities.
5.2.1 In case there is a delay by the SELLER to confirm notice of readiness of materials and the
BUYER had made financial arrangements as agreed, the BUYER has the option to cancel the
contract or take the delivery of the material at the contract price & terms within a period of 90
days beyond the originally agreed delivery period.
5.3 While nominating a vessel the BUYER shall communicate following particulars for the
nomination:
(a) Name of the Vessel
(b) Year of built & Flag
(c) Classification

(d) LOA/Beam/Draft at max DWT.

(e) Loadable tonnage/ nominal tonnage for Delivery
(f) No of Decks: (single Decker/TWEEN Decker if TWEEN, the third deck, if any)
(g) No of Holds/Hatches
(h) Hatch Openings: Weather deck/ Tween deck
(i) Type of hatch covers: Weather deck/ Tween Deck
(j) Cargo gear capacity: Cranes - single swinging Derricks-Configuration Hatch wise -Derricks
Working in union purchase-not acceptable
(k) ETA/ lay date/cancellation date at load port
5.3.1 The SELLER is entitled to following additional information if required:
(l) Original name of vessel if changed at present
(m) Whether disponently owned
(n) Owners P & I Club
(o) Disponent Owners P & I Club
(p) Last special survey
(q) Last dry-docking
(r) Position of engines
5.4 The vessel nominated by the BUYER shall be geared and equipped with cranes/ derricks
competent of lifting minimum 15 MT tonnage at a time from the wharf and placing the materials
in the places of the hatches including wing spaces and having minimum four available hatches.
The SELLER shall guarantee a loading rate of 4000 MT PWWD SATAFTSHEXEIU subject to
these terms and conditions on the basis of five or more available workable hatches or hooks,
whichever is less. The SELLER is not obliged to accept vessels with gear capacities, less than
what is specified below or vessels offering less than three hooks. If due to any reason, a vessel is
accepted with lower gear capacity or lesser number of hatches/hooks, the load rate shall be
reduced prorata. The rate of demurrage/despatch shall be as per Charter Party but not exceeding
rates described below:
Pig Iron 9999 or below (MT) US$ 3000 PDPR/HD
Pig Iron 10000- 19999 US$ 4000 PDPR/HD
Pig Iron 20000 & above US$ 5000 PDPR/HD
Rate of Demurrage/Dispatch, less than above is acceptable to the SELLER.
5.5 The SELLER shall communicate acceptance/non-acceptance within next working day and
with reasons in case of non-acceptance. However, the SELLER is not obliged to consider any
nomination of the vessel unless the BUYER makes financial arrangement as agreed.
5.6 Upon arrival of the vessel within the limits of the loading port and after
(A) Ensuring that the hatches/holds of the vessel have been thoroughly cleaned,
(B) Obtaining free pretique and
(C) Ensuring that the vessel is load-ready in all respects, the Master of the vessel shall serve the
Notice of readiness of the vessel to load the Materials (i.e. Master's N/R) on the port office of the
SELLER at the loading port, during normal office hours which are 9.30 AM to 4.30 PM from
Monday to Friday and from 9.30 to 1200 Hours on Saturday. The master's N/R shall not be
served on Saturday afternoon/Sundays/Port holidays/ Charter Party holidays.
5.7 Upon arrival of the vessel within the limits of the loading port or at any time later till
completion of loading, if the SELLER or the load port authorities consider that the cranes/ gears
of the vessel are not capable of lifting the materials of the weights and dimensions as agreed,
from the wharf and placing the material inside the hatches as required for loading, the SELLER
has a right to reject the vessel outright without any liability including dead freight and all other
consequences/losses arising thereof. Incase it is considered that the gears are not capable of
maintaining the loading rate guaranteed, the SELLER has a right to assessment by an independent
marine surveyor to determine such load rate and the same shall be binding on the BUYER. In
case the surveyors find the gears not capable of loading from wharf to any part of the hatches,
nomination/ acceptance stands cancelled with no risks/ costs to the SELLER and the charges of
the independent marine surveyor shall be borne by BUYER.
5.8 The BUYER shall ensure that the charter party governing the shipment shall, inter-alia,
include following provisions:
5.8.1 Vessel shall be consigned to buyer's agent at load port, owners paying customary agency
fee.
5.8.2 The ship owners shall bear all ports dues/charges/levies except port loading charges,
tonnage dues, light dues and other taxes, assessments and charges that are customarily payable by
shippers.
5.8.3 Ten days prior to ETA of vessel at load port, the master of the vessel shall give
telex/cable/fax intimation to the SELLER.
5.8.4 Thereafter at the interval of 7 days/72 hrs/24 hrs before the ETA of the vessel, master of the
vessel shall send telex/cable/radio messages regarding the ETA of the vessel to the SELLER and
as well to the designated Officer of the SELLER at the Port.
5.8.5 Each vessel shall hold a valid gear certificate in conformity with the International Dock
Safety Convention, covering the duration of each voyage and confirming that all the gears have
been duly tested. The Master of the vessel shall make the gear certificate available to the
representative of the SELLER for verification before/on berthing of the vessel at the loading port,
in any case prior to commencement of loading. Similarly, the hatch wise loading plan for the
Materials shall be furnished by the Master of the vessel before/on its berthing.
5.8.6 The Master of the vessel shall allow on board the vessel the representative of the
independent inspection agency appointed by the SELLER and provide such information/
assistance as may be required by such agency in connection with the performance of their
assigned duties.
5.8.7 The Master of the vessel shall provide free use of light on board the vessel as may be
required for working the vessel at the loading port at all times and in each case free of expense to
the SELLER. The master of the vessel shall make available all the hatches for loading of the
materials throughout the period the vessel is worked for loading of the materials except in such
hatches where the materials have been completely loaded.
5.8.8 lay time and excepted period:
5.8.8.1 Lay time shall commence at 1300 Hrs if Master's N/R is served in the forenoon and at
0800 Hrs of the next working day if the Master's N/R is served in the afternoon.
5.8.8.2 Time between noon on Saturday and 0800 Hrs on Monday and/or between noon on the
last working day preceding a legal holiday and/or Port holidays/Charter party holidays and 0800
Hrs in the next working day shall not count as lay time even if used, unless the vessel is on
demurrage.
5.8.8.3 After berthing, if the port authorities or representative of the SELLER find that the vessel
is not ready in all respects to load, the lay time will not commence until the vessel is in fact ready
in all respects to load. The time used by the vessel in proceeding from the anchorage to the berth
shall not count as lay time.
5.8.8.4 In the event of breakdown of vessel gear or other equipment of the vessel by reason such
as insufficient power etc., not attributable to shipper, the period of such break down shall not
count as lay time.
5.8.8.5 Time lost due to any of the following reasons shall not count as laytime unless the
vessel is on demurrage:
- Non weather working days declared by the port authorities even if the vessel is worked.
- War, Rebellion, Tumult, Political disturbances, Insurrection.
- Lockout, Strikes, Riots, Civil commotions.
- Epidemics, Quarantine, Land-slips, Floods, Frost or Snow, Boretides, Bad Weather.
- Stoppage of work, whether partial or general by workmen/long shoremen/ tug-boatmen or other
hands essential to the working of the vessel or loading of the materials into the vessel.
- Accidents at Wharf.
- Intervention of security, customs and/or other constituted authorities.
- Stoppage, whether partial or total, due to any other causes beyond the control of the SELLER.
5.8.8.6 The opening and the closing of the hatches of the vessel shall always be done by the
vessel's crew and the cost involved therein shall be to the account of the vessel.
5.8.8.7 The time lost due to shifting of the vessel within the port limits shall not count as lay time.
However, if the shifting is required by the SELLER, the shifting charges shall be to the account
of the SELLER and time lost in shifting shall count as lay time.
5.8.8.8 The overtime of the crew and officers shall be to the account of the vessel.
5.8.9 If any damage is caused to the vessel at the loading port at the time of loading of the
Materials by the Stevedores engaged by the SELLER, the claim, if any, for such damage
shall be settled directly between the ship owners and stevedores. The Master of the
vessel shall lodge such claim, if any, on the stevedores, promptly after the damage has
been sustained and then confirm in writing duly supported by the Third Party Damage.
Reports, prior to the departure of the vessel from the loading port, failing which the claim
shall stand barred and the stevedores shall stand absolved and relieved of all
responsibility. Subject to compliance with the conditions enumerated in the clause, in
case the stevedores fail to settle the same, the SELLER shall be responsible for settlement
of such claims.

5.8.10 Statement of Facts:

Immediately after completion of loading of the materials into vessel and before the sailing of the
vessel from the loading port(s) a statement of facts shall be made out at the loading port(s) duly
signed by and distributed amongst; (a) Master of the vessel/Agent of the vessel at the loading port
(b) Agents/Representative(s), if any of the BUYER at the loading port and (c) representative of
the SELLER at the loading port.
5.8.11 The Master of the vessel shall deliver a stowage plan in triplicate duly signed by him before loading
and immediately after completion of loading and sailing of the vessel, if sought by the SELLER.
5.8.12 The ship owners shall instruct their Agents at the loading port to issue the Bill(s) of Lading
with marking as per LC (see 6.2.1(a)) to the representative of the SELLER, immediately but
within one day from the date of completion of loading of the materials into the vessel.

6. TERMS OF PAYMENT:

6.1 Unless agreed otherwise, financial arrangements shall be made within Ten (10) Calendar
Days (Excluding Saturdays, Sundays) from the date of sale confirmation by the SELLER or
before nomination of the vessel whichever is earlier, in USD by the BUYER in favour of
SELLER by means of a confirmed irrevocable without recourse to the drawer's Letter of Credit
(LC), governed by Uniform Customs and Practices for Documentary Credits (as applicable on
date of opening of LC conforming to SELLER'S standard format), representing the value of the
contract quantity of the materials with positive tolerance, on the basis of FOBST, established
through any first class international bank in favour of MMTC Ltd, Bhubneshwar , India. The LC
should be advised through
State Bank of India, Bhubneshwar
as per the negotiating documents negotiable at the counters of any branch or any bank of India.
6.1.1 Opening of valid LC within stipulated time is an essential condition. Sellers are at liberty to
terminate the contract and claim damages/ losses in case of such failure of buyer for breach of
above essential conditions.

6.2 PAYMENT AGAINST LC

6.2.1 The LC shall be available for payment of 100% of value of invoice (less if any advance is
already paid by the BUYER), covering the material shipped against presentation of the SELLER
drafts drawn at sight accompanied by following Bank documents (and also against Clause No.6.8
herein below).
a) 3/3 original on board Ocean or Charter Party Bill (s) of Lading.
b) SELLER's Packing list
c) SELLER's signed Commercial Invoices
d) Works Test Certificate(s) issued by the SELLER
e) Pre-shipment Inspection certificate - issued by the independent inspection agency appointed by
the SELLER.
Note: One non-negotiable copy each of the aforesaid documents shall be dispatched by Courier
by the SELLER to the BUYER within 7 working days from the date of BL.
6.2.2 The LC shall also be available for payment against 100% of Invoice value as per clause
No.6.8 herein below.
6.2.3 In case the LC opening bank does not pay the due amount as per the LC within specified
time in the LC to the beneficiary's bank in India, the BUYER shall be liable to the SELLER for
payment of interest charged by, the negotiating bank for the delay in such remittances.
6.3 The LC shall specifically provide that Bill(s) of Lading and Pre-shipment Inspection
Certificate with remarks such as:
Atmospheric/surface/superficial rust/edge rust, unprotected cargo, stored in open area prior to
loading, rust stained/partly rust stained shall be acceptable for negotiation.
6.4 The LC should provide for shipment of materials with quantity tolerance as specified in
clause 4.2 herein above or as otherwise agreed. It should be valid from date of opening up to date
of shipment as per the agreement and up to actual date of completion of shipment in the vessel
nominated by BUYER and 21 days beyond that for negotiations of documents.
6.5 All Bank and other charges incurred outside the territory of India shall be borne and paid for
by the BUYER.
6.6 The financial arrangement, required to be made by the BUYER, shall be deemed to be made
only on receipt of L/C at the bank as specified in clause 6.1 above unless agreed otherwise. In
case the BUYER does not make the financial arrangement within the agreed time, the SELLER
may forfeit the EMD if any with the SELLER.
6.7 If any advance is made by the BUYER against any contract, in part or full, if the BUYER is
not able to indicate size wise breakup of the material atleast 4 weeks prior to the expiry of
contractual delivery period.
i) In case of fall in prices, the SELLER is entitled to recover difference in contract
price and the weighted average price realized by SELLER for the deliveries made in
the last month within the contract delivery period and return the balance and EMD to
the BUYER without interest.
ii) The SELLER will return the advance without interest in case the weighted average
prices realized for the last month of delivery as per contract is more than the contract
price.

6.8 In the event of

 (A) The failure of the BUYER to nominate suitable vessel within lay days given in
Seller's notice of readiness of cargo or otherwise acceptable to Seller, or within
15 days from the N/R of cargo whichever is earlier, or
(B) The vessel nominated by the BUYER and accepted by the SELLER failing to
arrive at the designated load port within the agreed lay-days for reasons other
than Force Majuere as defined under clause No.10 herein below, or
(C) The vessel (nominated by the BUYER and accepted by the SELLER) being
found unsuitable after its arrival at designated load port as certified by
independent marine surveyors.
The SELLER shall be entitled to negotiate his commercial Invoice against the LC
opened by the BUYER and realize 100% of the value of the Materials ready for
shipment on the basis of certificate issued by the independent inspection agency
appointed by the SELLER, certifying the quantity of the materials ready for
shipment and also certifying that the materials are in good condition. The
materials will thereafter be held in custody by the SELLER at the risk and
responsibility of the BUYER at the storage yard of the SELLER at the load port.
While the SELLER shall hold the materials free of ground rent for a period of 15
days from the date of payment, for a storage extending beyond 15 days from the
date of payment BUYER shall pay to the SELLER ground rent calculated at the
rate of USD 1.00 per metric ton per week or part thereof. The BUYER shall
however nominate another suitable vessel within reasonable time for taking
delivery of the cargo for which payment has been realized by the SELLER as
aforesaid and subject to such vessel arriving at load port within the agreed lay-
days the SELLER shall at his cost deliver FOB (Stowed) the materials for which
payment has been realized by the SELLER as aforesaid. The LC established by
the BUYER in favour of the SELLER shall make specific and unconditional
provision to the above effect.

7. SETTLEMENT OF DEMURRAGE/ DESPATCH MONEY IN RESPECT OF

EACH SHIPMENT:
Based on the Statement of Facts, the computation of lay time allowed and lay time used
shall be based on provisions contained in clause 5.8 and its sub clauses herein above. Dispatch
money, if any, calculated on the basis of "Working time Saved" shall be arranged to be remitted
by the BUYER to the SELLER within sixty days from the date of receipt of the claim of the
SELLER with lay time statements. Incase of demurrage, the SELLER against the dispatch money
pending from the BUYER if any shall adjust the agreed amount. If not, the SELLER shall
endeavor to remit the agreed amount of demurrage within sixty days from the date of receipt of
claim from BUYER with supporting documents.

8. RISK AND TITLE:

Except in the case of negotiation under LC as per clause No.6.8 herein above, with respect to
each shipment, the risk shall pass from the SELLER to the BUYER as soon as the materials cross
the ship's rails at the port of loading and the title to the materials shall pass from the SELLER to
the BUYER only after the SELLER has negotiated the documents and has received payment of
the full invoice value of the materials shipped from the negotiating bank.

9. RIGHT OF TRANSFER:

Neither the BUYER nor the SELLER shall be entitled to assign or transfer contract resulting from
this Agreement except to its successor or to the transferee of all or substantially all of its assets,
and in the case of any such assignment or transfer, the contract shall be binding upon and shall
insure to the benefit of such successor or transferee.

10. FORCE MAJEURE:

If the SELLER and/or the BUYER are prevented from discharging its or their obligation under
this agreement by reasons of arrests or restraints under rules of Government, War, Blockade,
Revolution, Insurrection, immobilization, Strikes, Riots, Civil Commotions, Lockouts, Accidents,
Acts of God, plague, or other epidemics, destruction of the materials by fire or flood or other
natural calamity or on account of any other cause interfering with the production and/or delivery
of the materials as herein above contemplated, the time for delivery shall be postponed by the
time or time during which production and/or delivery is prevented by any such causes as herein
above mentioned, provided that in the event of such delay exceeding ninety days, the party other
than the party which invokes the force majeure may at their option, cancel this agreement by
Notice in-writing to the other party in respect of the undelivered quantity of the materials without,
however, any right against or being responsible to the other party for such cancellation. The party
invoking force-majeure shall within 15 days of the occurrence of force-majeure causes, put the
other party on notice supported by a certificate from the Chamber of Commerce or concerned
governmental authority and shall likewise intimate the cessation of such causes. If the force-
majeure condition continues beyond a period of six months the SELLER or the BUYER may at
his option cancel this agreement by notice in writing to other party in respect of the undelivered
quantity of the materials without, however, any right against or being responsible to the other
party for such cancellation.

11. LEGAL INTERPRETATION:

The contract of sale and purchase and these terms and conditions shall be governed interpreted
and construed in accordance with the Laws of India for the time being in force. For all
commercial terms and abbreviations used hereunder, which have not been otherwise defined, the
rules of INCOTERMS 1990, latest revision, shall be applied.

12. SETTLEMENT OF DISPUTES:

Any dispute or difference whatsoever arising between the parties out of or relating to the
construction, meaning and operation or effect of this contract or the breach thereof shall be settled
by arbitration in accordance with the Rules of Arbitration of the Indian Council of Arbitration and
the Award made in pursuance thereof shall be binding on the parties. The venue of Arbitration
proceedings shall be New Delhi.

13. JURISDICTION OF COURTS:

All disputes shall be subject to the jurisdiction of the competent courts of New Delhi, India.

14. IMPORT/EXPORT LICENSE:

It shall be the responsibility of the SELLER to arrange export license, if any, required and it shall
be the responsibility of the BUYER to arrange for the import license, if required, in the country
into which the material are intended to be imported.
15. MODIFICATIONS/WAIVERS:

No change in respect of these terms and conditions are valid unless both the parties agree the
same to in writing. All previous negotiations/ understandings between parties are cancelled while
entering into an agreement as per these terms and conditions. Failure to enforce any conditions
hereunder contained shall neither be deemed as waiver of the conditions itself nor authorize any
subsequent breach thereof.

FORMAT FOR LETTER OF CREDIT

FROM: ----------------------------------------------------(NAME & ADDRESS OF THE LC

OPENING BANK)

TO: SBI COMMERCIAL BRANCH

IDCOL HOUSE, ASHOK NAGAR,
BHUBANESWAR-751009, INDIA
SWIFT: SBININBB119
TELEX: 6756209SBUBIN
FAX: 00-91-674-2530803
A/C NO: MMTC LTD, BHUBANESWAR 01602050148

OR

---------------------------------------------------
LC APPLICANT: (NAME & ADDRESS OF THE LC OPENER)
---------------------------------------------------
BENEFICIARY: MMTC LIMITED, ALOK BHARATI COMPLEX, 7TH FLOOR, SHAHID
NAGAR, BHUBANESWAR-751007
---------------------------------------------------
WE HAVE OPENED OUR IRREVOCABLE WITHOUT RECOURSE TO DRAWER LETTER
OF CREDIT NO............ DATED..............FOR THE SUM NOT EXCEEDING US$............. (US
DOLLAR.........................) PAYABLE AT SIGHT AT THE COUNTERS OF THE
NEGOTIATING BANK IN BHUBNESHWAR AGAINST PRESENTATION OF
BENEFICIARY'S DRAFT DRAWN ON OURSELVES FOR 100 PERCENT VALUE OF
INVOICE ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
1. COMMERCIAL INVOICE - ONE ORIGINAL PLUS TWO SIGNED COPIES COVERING
MATERIALS SHIPPED.
2. FULL SET 3/3 ORIGINAL ON BOARD OCEAN OR CHARTER PARTY BILLS OF
LADING ISSUED TO ORDER OF THE BENEFICIARY AND BLANK ENDORSED
MARKED "FREIGHT TO PAY" OR REIGHT PAYABLE AS PER CHARTER PARTY"
EVIDENCING SHIPMENT FROM PARADIP PORT, INDIA
TO..............NOTIFYING...............................
3. WORKS TEST CERTIFICATE ISSUED BY THE BENEFICIARY - IN DUPLICATE.
4. INSPECTION CERTIFICATE ISSUED BY INDEPENDENT INSPECTION AGENCY
APPOINTED BY THE SELLER, CERTIFYING QUANTITY AND QUALITY OF THE
MATERIALS SHIPPED - IN DUPLICATE.
5. PACKING LIST - IN DUPLICATE.
6. CERTIFICATE OF ORIGIN ISSUED BY, THE _________________CHAMBER OF
COMMERCE &
INDUSTRY, _____________________________ OR, THE BENEFICIARY, - IN DUPLICATE.
7. COPY OF CABLE OR TELEX OR FAX ISSUED BY BENEFICIARY TO THE LC
APPLICANT (TELEX NO.) AND/OR (FAX NO.) WITHIN 3 WORKING DAYS AFTER THE
ON-BOARD BILL OF LADING DATE ADVISING THE NAME OF THE VESSEL,
B/LADING NUMBER, DATE AND QUANTITY LOADED.
------------------------------------------------------------
DESCRIPTION OF THE MATERIALS, QUALITY, PACKING & MARKING
QUANTITY :
UNIT PRICE : USD .... PMT FOB ST PARADIP PORT
SHIPMENT FROM : PARADIP PORT INDIA
SHIPMENT TO : ...............
LATEST SHIPMENT DATE :
L/C EXPIRY DATE :
PLACE OF LC EXPIRY : INDIA
PARTIAL SHIPMENTS : PERMITTED
TRANSHIPMENT : PROHIBITED
------------------------------------------------------
SPECIAL CONDITIONS:
1. OCEAN FREIGHT SHALL BE SETTLED BY THE LC APPLICANT OUTSIDE OF THIS
LETTER OF CREDIT.
2. MARINE INSURANCE, IF REQUIRED, TO BE COVERED BY THE LC APPLICANT.
3. ALL BANK CHARGES INCLUDING OPENING OF LETTER OF CREDIT INCURRED
OUTSIDE INDIA SHALL BE BORNE AND PAID FOR BY THE LC APPLICANT. ALL
BANK CHARGES INCURRED IN INDIA SHALL BE BORNE AND PAID FOR BY THE
BENEFICIARY.
4. IN THE EVENT OF (A) THE FAILURE OF THE LC APPLICANT TO NOMINATE
SUITABLE VESSEL FOR SHIPMENT WITHIN AGREED LAYDAYS WITHIN 15 DAYS OF
SELLERS NOTICE OF READINESS (HEREINAFTER REFERRED TO AS N/R) OF CARGO
OR OTHERWISE AGREED BY THE SELLER OR WITHIN FIFTEEN DAYS OF N/R OF
CARGO WHICHEVER IS EARLIER OR (B) THE VESSEL NOMINATED BY THE LC
APPLICANT AND ACCEPTED BY THE BENEFICIARY FAILING TO ARRIVE AT
PARADIP PORT WITHIN AGREED LAYDAYS OR (C) THE VESSEL (NOMINATED BY
THE LC APPLICANT AND ACCEPTED BY THE BENEFICIARY) BEING FOUND
UNSUITABLE AFTER IT'S ARRIVAL AT PARADIP PORT AS CERTIFIED BY
INDEPENDENT MARINE SURVEYORS, THIS CREDIT IS PAYABLE AT SIGHT AT THE
COUNTERS OF NEGOTIATING BANK AT BBSR AGAINST PRESENTATION OF
BENEFICIARY'S DRAFT DRAWN ON OURSELVES FOR 100 PERCENT VALUE OF
INVOICE ACCOMPANIED BY THE FOLLOWING DOCUMENTS:-
(A) COMMERCIAL INVOICE - ONE ORIGINAL PLUS TWO SIGNED COPIES.
(B) COPY OF BENEFICIARY'S NOTICE OF READINESS OF CARGO - IN DUPLICATE.
(C) WORKS TEST CERTIFICATE ISSUED BY THE BENEFICIARY - IN DUPLICATE.
(D) CERTIFICATE ISSUED BY INDEPENDENT INSPECTION AGENCY APPOINTED BY
THE SELLER CERTIFYING: MATERIALS WERE INSPECTED AT THE STORAGE YARD
OF THE BENEFICIARY AT PARADIP PORT, AND, MATERIALS ARE IN GOOD
CONDITION AND THE QUANTITY AS PER THE COMMERCIAL INVOICE ARE READY
FOR SHIPMENT,
(E) BENEFICIARY'S DECLARATION THAT SUITABLE VESSEL HAS NOT BEEN
NOMINATED BY THE LC APPLICANT WITHIN AGREED LAYDAYS OR THAT
THE VESSEL NOMINATED BY THE LC APPLICANT AND ACCEPTED BY THE
BENEFICIARY FAILED TO ARRIVE AT PARADIP PORT WITHIN THE AGREED
LAYDAYS FOR REASONS OTHER THAN FORCE MAJEURE OR THAT THE
VESSEL (NOMINATED BY THE LC APPLICANT AND ACCEPTED BY THE
BENEFICIARY) BEING FOUND UNSUITABLE AFTER ITS ARRIVAL AS
CERTIFIED BY THE INDEPENDENT MARINE SURVEYORS (COPY OF
CERTIFICATE OF MARINE SURVEYOR TO BE PRESENTED IN SUCH AN
EVENT) AS THE CASE MAY BE.
(F) BENEFICIARY'S DECLARATION THAT (1) THE MATERIALS AS MENTIONED IN
THE COMMERCIAL INVOICE WILL BE HELD IN CUSTODY BY THE BENEFICIARY AT
THE RISK AND RESPONSIBILITY OF THE LC APPLICANT AT THE STORAGE YARD
OF THE BENEFICIARY AT PARADIP PORT, (2) UPON NOMINATION OF SUITABLE
VESSEL WITHIN REASONABLE TIME BY THE LC APPLICANT FOR TAKING
DELIVERY OF THE MATERIALS FOR WHICH PAYMENT HAS BEEN REALISED BY
THE BENEFICIARY AS AFORESAID AND SUBJECT TO SUCH VESSEL ARRIVING AT
PARADIP PORT WITHIN THE AGREED LAYDAYS, THE BENEFICIARY SHALL AT HIS
COST DELIVER FOB (STOWED) THE MATERIALS FOR WHICH PAYMENT HAS BEEN
REALISED BY THE BENEFICIARY AS AFORESAID.
5. REMARKS SUCH AS "MATERIAL WITH SUPERFICIAL/ SURFACE/ ATMOSPHEREIC/
EDGE RUST" AND/OR "UNPROTECTED CARGO" AND/OR "STORED IN OPEN AREA
PRIOR TO LOADING" AND/OR "RUST STAINED" AND/OR "PARTLY RUST STAINED"
APPEARING IN THE IN SPECTION CERTIFICATE, AND/OR BILL OF LADING ARE
ALSO ACCEPTABLE.
6. THIS LC CAN BE CONFIRMED BY ANY BANK IN INDIA, IF REQUESTED BY THE
BENEFICIARY, AND SUCH CONFIRMATION CHARGES ARE TO THE ACCOUNT OF
BENEFICIARY.
7. TOLERANCE OF FIVE (+/-5 %) PERCENT ON CREDIT AMOUNT AND QUANTITY IS
ACCEPTABLE.
8. THIS CREDIT IS AVAILABLE WITH ANY BANK IN INDIA FOR NEGOTIATION AND
PAYMENT.
9. THIRD PARTY DOCUMENTS ARE ACCEPTABLE.
10. DOCUMENTS TO BE PRESENTED FOR NEGOTIATION WITHIN 21 DAYS AFTER
THE DATE OF ISSUANCE OF SHIPPING DOCUMENTS BUT WITHIN THE VALIDITY OF
THIS CREDIT.
11. WE HEREBY AGREE WITH BENEFICIARY AND THE NEGOTIATING BANK THAT
ALL DRAFTS DRAWN BY THE BENEFICIARY UNDER AND IN COMPLIANCE WITH
THE TERMS 0F THIS CREDIT WILL BE DULY HONOURED BY US AS PER
REIMBURSEMENT INSTRUCTIONS APPEARING HEREIN BELOW:
REIMBURSEMENT INSTRUCTIONS:
UPON PRESENTATION OF DOCUMENTS COMPLYING IN ALL RESPECTS TO LETTER
OF CREDIT TERMS (THIS WILL INCLUDE NEGOTIATION OF DOCUMENTS UNDER
THE PROVISIONS OF CONDITION NO.4 OF SPECIAL CONDITIONS OF THIS CREDIT IF
SUCH AN EVENTUALITY HAS ARISEN) THE NEGOTIATING BANK IS AUTHORISED
TO CLAIM ON US BY TESTED TELEX/SWIFT CERTIFYING THAT ALL TERMS AND
CONDITIONS HAVE BEEN COMPLIED WITH AND THAT THE RELATIVE
DOCUMENTS HAVE BEEN FORWARDED TO US BY COURIER AND/OR REGISTERED
AIRMAIL, WE UNDER TAKE TO REMIT WITHIN TWO WORKING DAYS AFTER
RECEIPT BY US OF YOUR TESTED TELEX/SWIFT CLAIM IN US DOLLARS IN
ACCORDANCE WITH THE NEGOTIATING BANK'S INSTRUCTIONS. INCASE OF ANY
DELAY IN REMITTENCE, INTEREST CHARGED BY NEGOTIATING BANK SHALL BE
PAID BY US. THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION) INTERNATIONAL
CHAMBER OF COMMERCE PUBLICATION NO.500. THIS TELEX IS OPERATIVE
INSTRUMENT AND NO MAIL CONFIRMATION WILL FOLLOW.
 PROFORMA OF BANK GUARANTEE

To

MMTC Ltd.,

Scope Complex, Core -1,

7, Institutional area,

Lodi Road,
New Delhi-110 003.

Bank Guarantee No. Dated:

LETTER OF GUARANTEE

WHEREAS MMTC LTD., NEW DELHI(hereinafter referred to as MMTC) have invited Tender vide Tender No.

Dated (hereinafter referred to as the said Invitation to Tender) for export of Pig Iron AND WHEREAS the

said Invitation to Tender requires that any eligible tenderer wishing to make an offer in response thereto, shall establish

an irrevocable EMD in favour of MMTC in the form of Bank Guarantee, for an amount of USD

VALID UPTO as guarantee, that the tenderer:

a) shall keep his offer firm and valid for acceptance by MMTC until hrs IST on or as extended.

b) shall in the event of the offer being accepted by MMTC establish a Letter of Credit in favour of MMTC in the form

indicated in the said Invitation to Tender covering full value of the quantity of Pig Iron at the price and on the terms

accepted by MMTC, within 10 (Ten) International banking days from the date of the Acceptance to Tender.

c) shall further arrange to lift the confirmed quantities as per the Letter of Credit by the last date of shipment indicated

in the Letter of Credit.

d) shall remit the dispatch amounts payable, if any, within the time specified in the terms and conditions of contract.

AND WHEREAS
M/s................(hereinafter referred to as the said Tenderer) wish to make an offer in response to the said Invitation to

Tender for the purchase of Pig Iron on the basis of FOBST, Paradip.

NOW THIS BANK HEREBY GUARANTEES that in the event of the said Tenderer failing to abide by any of the

conditions referred to in any of the preceding paragraphs, this Bank shall pay ( through the ......Branch of this Bank at

to MMTC on demand and without protest or demur US$ .......(US DOLLARS...........)). This Bank further agrees that

the decision of MMTC as to whether the said Tenderer has committed a breach of any of the conditions referred to in

the preceding paragraphs, shall be final and binding.

THIS BANK FURTHER undertakes that this Guarantee shall remain irrevocably valid and in force up to .

For and on behalf of

Signature

(Name of the duly constituted attorney and

Authorized Signatory)

Designation

Name and Address of the Bank

 BIBLIOGRAPHY

REFERENCES

1. Ministry of steel annual report2007-2008

2. Commerce ministry document on FOREIGN TRADE POLICY

3. MMTC journals and report

4. TATA STEEL annual report

5. STEEL AUTHORITY OF INDIA LIMITED tender notices and

report

WEBSITES

 http://www.mmtclimited.com

 http://www.steel.gov.in

 http://www.worldsteel.org

 http://www.steel.nic.in

 http://www.steelworld.co.in

 http://www.tatasteel.com

 http://www.steeelprices-india.com

SEARCH ENGINE

http://www.google.com

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