India’s steel demand to rise by 7.2% over 2019-20

In terms of calendar year, the Indian Steel Association has forecasted India’s steel demand to grow by 7.1 per cent in 2019 and by 7.2 per cent in 2020

April 23, 2019

Demand will hold strong at 7.2 per cent in 2020-21; India’s steel consumption is forecasted to cross 100 million tonnes in 2019

In 2018, India retained its position as the world’s third largest steel producer for the third year in a row owing to favourable factors

India’s steel demand is being driven by rising manufacturing and projects such as Bharatmala, Smart Cities, Swachh Bharat Mission

India’s automotive as well as consumer and electronic durables industries will support steel demand growth in the near future

Demand for steel in India is expected to rise by 7.2 per cent over the financial year 2019-20, according to an April 10 statement by the Indian Steel Association. In terms of calendar year, India’s steel demand is expected to grow by 7.1 per cent in 2019 and by 7.2 per cent in 2020. Going ahead, the demand growth will hold at 7.2 per cent in 2020-21 as well. Meanwhile, steel consumption is forecasted to cross 100 million tonnes in 2019. The nation’s crude steel production has steadily risen from 89 million tonnes (mt) during financial year 2014-15 to 103.1 mt during financial year 2017-18, helping India retain its position as the world’s third largest crude steel producer for the third year in a row.

While the growth in steel demand is being driven by increasing manufacturing activity and infrastructure development across the nation, the growth in steel output has been led by domestic availability of raw materials such as good quality iron ore and cost-effective labour. Additionally, the demand growth has been further stimulated by a more than 8 per cent economic growth during the first half of 2018-19. This strength has since been mellowed owing to weakness in the rural sector, as well as high crude oil prices and unfavourable foreign exchange rates. This weakness is expected to be balanced going ahead with an uptake in investment and consumption related to developmental projects.

The Indian Steel Association said that the sector will see stability backed by an above 7 per cent growth in the nation’s economy over the coming two years. The industry body said that large infrastructure programmes such as Bharatmala Pariyojana, Smart Cities Mission, Sagarmala Programme, Swachh Bharat Mission, railway modernisation, Industrial Corridors, metro rail projects, UDAN air connectivity scheme, and new renewable energy projects, among others, will ensure continuing demand for steel. Separately, India’s automotive sector has seen unprecedented demand and will be another factor boosting India’s steel demand. Consumer and electronic durables will also bolster steel demand.