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The Subprime crisis was the main reason of recession that started in US in the year 2007. The
other name for Subprime Crisis is Housing Bubble. Though India was never in recession but still
it witnessed economic slowdown. The impact of recession was very minimal because of various
precautionary measures taken by the government. The subprime Crisis had a major impact on
retail sector. Buildings that were under construction remain under construction, people started
hesitating to buy new properties, confidence and moral of people came down, all these and
other factor lead to fall in demand of steel in domestic as well as in international level. As there
was no demand for their product in the market the steel industry reduced their productions,
which lead to sharp fall in their price. The prevailing condition in steel had raised question in
the prospects of India͛s steel industry. Even a one single negative speculation and exaggerated
fear pulled all stocks down, the steel industry stock was been hit by specified and genuine
concerns.

Many steel producers acquired steel making, processing or mining assets in the past few years.
All these assets had lost their value with the downswing in the market. The current reality
proves that these assets were bought expensive. Their fate will depend on how long this
recession will continue and what will be the long-term growth path of the industry. It is well
understood that these assets were not gobbled up to take advantage of short-term conditions,
but, even on a longer term considerations, many of the acquisitions may prove burdensome to
Indian steel companies. As per the analysts, global steel consumption can fall in absolute terms
in future. Whether it is in the housing industry or any other industry, substantial surplus
capacity has already been created.

The conditions in China are terrible. The market seems to have collapsed. Steel production has
fallen sharply. No one knows today how far China will go down this way? Ports are packed with
iron ore with no buyers despite the fact that imports from India and Brazil have fallen sharply. If
China's annual steel consumption falls by about 50-60 million tons in 2009 and production by
the same measure, it will have a huge impact on global steel and related industries. Much of
the capacity enhancement in iron ore, coal or shipping globally was based on the strong growth
prospects of the Chinese economy.


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uY ÷

 
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‰uring the year 2008-09, SAIL recorded profit (before tax) of RS 9,403 crores and profit (after tax) of RS
6,175 crores. SAIL registered a record turnover of RS 48,681 crores in the same year, 6.9% higher year-
on-year basis. ‰uring all these time shareholders were happier as they got higher dividend. As
recommended by the SAIL Board, the company paid final dividend to its shareholders at 13% of paid-up-
equity, with total dividend payout (including interim dividend of 13%) for the year 2008-09 at 26%
amounting to RS 1.074 crores. 250 MW power plant in joint venture with NTPC at Bhilai, slab
caster along with secondary steel making facilities at Bhilai, oxygen plant and cold dust injection
in two blast furnaces at ‰urgapur, pipe coating plant at Rourkela, up gradation of hot strip mill
and oxygen plant at Bokaro were also commissioned during the year.Y‰uring 2008-09, SAIL
produced 12.5 million tons of saleable steel by achieving 113% capacity utilization, and
produced 14.4 million tons of hot metal and 13.4 million tons of crude steel.

uY ÷ 
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RINL was facing a stiff competition from SAIL throughout the year. In order to overcome from this stiff
competition, RINL came up with expansion plan to double its annual liquid steelmaking capacity from
the present level of 3 million tons per annum of production to 6.3 million tons per annum at an
estimated cost of RS 12,228 crores. ‰uring the year RNIL achieved a turnover of RS 10,458 crores in
2008-09 surpassing the level of RS 10,433 crores achieved in 2007-08. Sales in domestic market were RS
10,379 crores and export at RS 79 crores. Being a Public Sector Unit, RNIL also provided a financial
assistance of RS 7 crores and medical services amounting to RS 1.71 crores, twice through team of
doctors for flood-affected area in the state of Bihar. In RINL, a total of 134 dealers have been
appointed in almost all districts in the southern states and adjoining states in order to ensure
wider availability and reach in interior parts of the country. ‰uring 2008-09, a total of 42,000
tons of steel was lifted by ‰istrict Level ‰ealers.

uY KY
‰uring the year NM‰C produced 28.97 million tons of Iron ore compared to 29.82 million tons
in the previous year 2007-08. The domestic sales of iron ore registered 22.60 million tons
during the same year as against 24.41 million tons during the previous year 2007-08. The
company exported 3.87 million tons of iron ore to Japan, South Korea and China valued
at approximately RS. 1,703 crores during the current year compared to 3.78 million tons valued
at RS. 875 crores during the previous year. The total sales during the year were RS 26.47 million
tons as against 28.18 million tons during the previous year.


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uY  ÷

 
TATA Steel has an integrated steel plant, with an annual crude steel making capacity of 6.8
million tons, located at Jamshedpur, Jharkhand. ‰uring the period of 2008-09 the crude steel
production of TATA Steel was 5.6 million tons which is higher by 12% over the production of 5.0
million tons previous year. The saleable production was at a higher level during the period April
2008-March 2009 (5.3 million tons) compared to the corresponding period last year (4.9
million). TATA Steel continuing with its program of expansion of hot metal and steelmaking
capacity by 3 million tons to reach 10 million tons.

÷

2007-2008: 5.0 million tons

2008-2009: 5.6 million tons

uY o   
JSW Steel has commissioned India͛s largest furnace with 3 million tons hot metal production
per annum. JSW Steel is a 6.8 million tons per annum integrated steel plant. The Brownfield
expansion plan of the Vijayanagar plant is in progress and is likely to complete by 2010, with a
total installed capacity of 9.6 million tons per annum. JSW Steel Tarapur and Vasind Works
specialize in down-streaming facilities which include 1.0 million tons.

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Jindal Steel & Power Limited is one of the fast growing major steel units in the country. Raigarh
plant of JSPL has a present capacity of 1.37 MTPA. Jindal Steel and Power LT‰, it has plans for
expansion of its Raigarh plant to a capacity of 6.0 million tons per annum. It also has plan for
two Greenfield projects in Orissa and Jharkhand with proposed capacity of 6.0 million tons per
annum each in the first phase.