Advantage Steel

WITH STEADY DEMAND FROM THE AUTOMOTIVE INDUSTRY AND MANY INFRASTRUCTURE PROJECTS IN THE PIPELINE, THINGS ARE LOOKING UP FOR THE STEEL INDUSTRY.

- Bindu Gopal Rao

RATINGS AGENCY ICRA HAS SAID THAT IN the first nine months of FY 2018, steel demand has grown by 5.2%. With so many infrastructure projects in the pipeline all across the country and steady demand from the automotive industry, demand for steel is certainly looking up. So, what is in store for the Indian steel industry?

India is within striking distance of dislodging Japan as the second largest producer of steel. The gap came down to 3.3 million tonnes (MT) in 2017; Japan produced 104.7 MT of steel last year compared to India’s 101.4 MT. Significantly, while India’s output grew 6.2% in 2017, Japan’s fell marginally by 0.1% in the year. India is therefore on its way to emerging as the second largest steel producer globally, next year.

Steel demand in India has witnessed steady growth over the last decade. The per capita consumption of steel has risen to 70 kgs as against 52 kgs a decade ago. But this is expected to change over the next few years with the growth in the Indian economy, which currently is at over 7%.

“India has become a net exporter last year. Many countries have anti-dumped Chinese steel and these markets have opened up for Indian exports. Many of the steel consuming sectors like automobiles, infrastructure and engineering have witnessed rebound in demand in India. The current budget lays emphasis on infrastructure and construction, which is a demand booster for the steel industry. It is reasonable to expect a growth of 10-15% in these sectors. Since no new greenfield steel capacities have been announced, the existing steel plants have to meet the emerging demand,” says Vikram Amin, executive director – sales & marketing, Essar Steel.

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