From 2004-2008, Indian iron and steel industry saw a rapid growth. The industry benefited from the strong demand for steel in US and China, which led to sharp rally in the global iron and steel prices, benefiting the Indian steel manufacturers.
This prompted a lot of Indian companies to invest in capacity expansion – organically and inorganically. We sawTata Steel acquiring Corus for $7.6 billion. Other private steel majors such as JSW Steel, Jindal Steel and Essar Steel and and state steel manufacturing company — SAIL — also started heavily investing in the capacity expansion.
The total steel capacity of the country is currently at 89 mtpa as compared to 35 mtpa ten years ago. India has become the fourth largest steel producer in the world from 8th largest ten years ago. India expected to become the second largest by 2016.
From 2004-2008 was a very good period for the steel industry. But, the global meltdown 2008 hit the Indian steel manufacturers hard. Falling steel prices and falling demand impacted the topline as well as bottom line of these companies. After the global slowdown from 2008 onwards, the focus of most of the companies shifted to India as Indian economy was still doing well relatively.