Steel ca­pac­ity to more than dou­ble on de­mand boom


STEEL de­mand in In­dia is gath­er­ing speed amid an in­fra­struc­ture build­ing boom that’s set to more than dou­ble ca­pac­ity of the na­tion’s mills, ac­cord­ing to the govern­ment.

“We’re ex­pect­ing do­mes­tic con­sump­tion to ac­cel­er­ate in the decade be­tween 2020-2030,” steel sec­re­tary Aruna Sharma said in New Delhi. An­nual ca­pac­ity stands at 126 mil­lion met­ric tons and is fore­cast to rise to 150 mil­lion tons by 2021, be­fore set­tling at 300 mil­lion tons, she said.

In­dia is in the midst of a wave of ur­ban­i­sa­tion that is set to boost de­mand for ev­ery­thing from cop­per to iron ore to steel as the econ­omy ex­pands over the next two decades, ac­cord­ing to an Aus­tralian govern­ment re­port. It’s taken seven years for per capita steel con­sump­tion to rise to 60 kilo­grams from 50 kilo­grams and just 18 months to get to 64 kilo­grams this year, Sharma said.

While the govern­ment’s push on in­fra­struc­ture will be the main driver for ris­ing de­mand, the min­istry is also seek­ing to boost steel’s use in struc­tures in­clud­ing pipes for drink­ing wa­ter, Sharma said in an in­ter­view on Oc­to­ber 6.

In­dia’s fin­ished steel con­sump­tion rose 4.3 per cent to 43 mil­lion tons in the six months to Septem­ber, while out­put climbed 5 per cent to 52 mil­lion tons, ac­cord­ing to the steel min­istry. In the fi­nan­cial year ended March 31, us­age grew 3 per­cent to 84 mil­lion tons, the slow­est pace in three years, even as pro­duc­tion gained 11 per­cent to a record 101 mil­lion tons.

In­dia is set to dis­place Ja­pan as the world’s sec­ond-largest steel pro­ducer, and by 2022 will churn out 146 mil­lion tons com­pared with 118 mil­lion tons from Ja­pan, ac­cord­ing to an April re­port from Aus­tralia’s de­part­ment of in­dus­try, in­no­va­tion and sci­ence. That com­pares with an es­ti­mated 785 mil­lion tons of pro­duc­tion in 2022 by in­dus­try leader China, it said.

The op­ti­mistic out­look for the in­dus­try amid record vol­umes, a price re­cov­ery and higher de­mand has sparked a surge in shares of In­dian mills. Tata Steel has ral­lied 74 per cent this year in Mum­bai, the best per­former on the bench­mark S&P BSE Sen­sex In­dex, and JSW Steel is up 57 per cent.

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