The rise in profit of Posco was due to increase in exports to 25 to 26 per cent of total sales and reduction in costs and general expenses by to 30 to 50 per cent. The company has halted or put an end to all investment plans both at home and abroad, which are not expected to be profitable.

Posco produces 24 million tonnes of steel equal to the entire production of India but it feels conditions in the second half of 1998 will be bad due to falling export prices and higher costs. It is evident therefore that the export market for steel will worsen during the coming months bringing more problems for the Indian steel producers.

This is also borne out by a report of the EU Commission which states that prices of flat products will be underpressure due to imports from cheaper sources, India which has lost its market for steel in Far East is targeting EU and the U.S. In its exports and will find that prices will fall, thus yielding less profits.

Posco of South Korea will be one of the biggest competitors India will have to face, And if Tata Steel finds its profit fall steeply there is going to be bad news for both SAIL and Essar during 1998-99.

The Russian and Ukraine Steel Industry which together export about 20 million tonnes of steel were selling 12 million tonnes in Asia, which market now is not available.

EU has successfully limited exports from CIS by imposing quota for five years. So the surplus has to go the US or to India which will have its impact on the steel industry in the country.

Kalyani Steel's success. When most of the units in the arc furnace steel industry are getting closed Kalyani Steel has found the art of survival by going highly technical. According to Metal Bulletin Monthly Carpenter Technology is a producerof a wide range of alloys and speciality steels with 14000 customers worldwide, and a portfolio of 450 grades of stainless steels, tool steel, high temperature alloys and electrical alloys in long product form. The company has net sales of $ 860 million in 1996.

Carpenter is in an expansion spree, trying to expand all over the world. Kalyani Steel has good facilities for producing alloy and special steels. Carpenter, apart from its extensive manufacturing facilities in the US acquired one more unit in Mexico in 1993, another n US in 1994, three in 1996 and four in 1997. In 1998 it has bagged Kalyani joint venture.

These companies will be fitted in a matrix of capabilities and their productions will be integrated world wide, according to the chairman of the company. Carpenter Technology apart from the production joint venture with Kalyani has a second venture with Kalyani for opening steel service centres all over the country. Of Carpenter steel products 15 per cent go in aerospace, 13 per cent in autos,11 per cent in electric and electronics, 10 per cent in general industrial equipment.

It also caters to other segments likes consumer durables, instruments and controls, housing, fabricated metal products, power generation, oil refining. Apart from Carpenter Technology Kalyani has also tied up with Mukand to produce basic steel semis at low cost by going in for mini blas furnace in Hospet region.

These innovating survival; strategies alone will save the arc furnace steel industry from closure due to rising costs of power and raw materials.

The steep fall of 59 per cent in Tata's Steel's net profit to Rs 27.09 crore during April June 1998 quarter from Rs 65.59 crore of the corresponding period of last year highlights the worsening conditions in Indian steel industry.