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.