Indian iron & steel: Unfulfilled potential - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Indian iron & steel: Unfulfilled potential

Mar 18, 2010

The flavor of the season is to fault the Chinese for their reckless monetary policies. The dragon nation has created a bubble and it will burst sooner or later, experts say. May be. But anyone who visits China comes back to talk about the incredible infrastructure that they have built. And how far left behind India actually is. And the numbers support the anecdotal evidence. The building block of infrastructure

Iron and steel is the building block of most infrastructure. There was little to choose between the Asian giants in this industry a few decades ago. But today China's achievements completely dwarf India's. China has about 14% of the world iron ore reserves. But it contributes a much larger share of around 35% of the world iron ore production. And amazingly, when it comes to crude steel production, China accounts for nearly 50% of the world numbers. Thus, China's phenomenonal presence in the iron and steel market is much more due to their own efforts than mere natural bounty.

The Asian giants' place in the world
% share in world total India China
Crude steel production* 5 47
Iron ore reserves** 4 14
Iron ore production** 9 35
*During the 11 months ending Nov, 2009, Source:;
**Source: US Geological survey, 2008

Contrast that with India. India has about 4% of the world iron ore reserves. It contributes to about 9% of the world iron ore production. A lot of the iron ore is shipped away to countries like China. It doesn't have sufficient steel making capacity to exploit its reserves. As a result, India accounts for a mere 5% of the world crude steel production. That's not the number the world's second fastest growing economy should post.

China vs. India
Multiple of
Crude steel production 10
Iron ore reserves 3
Iron ore production 4

In terms of a direct comparison, China has about 3 times India's iron ore reserves. It produces 4 times as much iron ore as India. But when it finally comes to steel production it churns out a staggering 10 times the metal as India. There is a simple lesson in all of this. Not a moral science lesson. But one in economics. It is not what you have that counts; what counts is what you do with it.

Equitymaster requests your view! Post a comment on "Indian iron & steel: Unfulfilled potential". Click here!


More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

A Critical Update on the Market (Fast Profits Daily)

Mar 30, 2021

In this video, I'll tell you why I am recommending caution in the market at this time.

My Recent Recommendation Will Profit from the Global Supply Chain Crisis (Profit Hunter)

Mar 31, 2021

A tiny chemical company, started in the Licence Raj era, is a great example of a new wealth creating opportunity.

My Stock Trading Strategy (Fast Profits Daily)

Mar 31, 2021

In this video I'll show you exactly how I go about picking stocks for trading.

What You Need to Find Hundred Baggers (Profit Hunter)

Mar 30, 2021

100 baggers of the last decade share this common trait. Here's how to use it to nail future multibaggers.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Apr 12, 2021 09:47 AM