Steel demand to grow by 7.5% in FY24: Indian Steel Association

NEW DELHI: The Indian Steel Association (ISA), an apex industry body of the large domestic steel firms, expects steel demand to grow by 7.5 per cent in the current financial year on higher capex by both public and private sectors. The pace will slow a bit to 6.3 per cent next fiscal. Demand grew by 13.3 per cent last fiscal.

“ISA estimates that domestic steel demand in the financial year 2023-24 will grow by 7.5 per cent to reach 128.85 million tons from 119.86 million tonnes (MT) in the FY23. In the next financial year, steel demand will grow by a further 6.3 per cent to reach 136.97 MT,” ISA said in a statement on Friday.

ISA’s forecast is based on demand-side assessment. It says all steel-using sub-sectors are expected to grow at 6 per cent or above in both FY24 and FY25. India’s strong economic growth and its success in reining in inflation unlike in other major economies will push demand.

The rising share of investment in GDP, backed by strong capital expenditure outlay by the government and improving private investments will drive construction, railways and capital goods sectors. This will drive growth in steel demand,” ISA said. In the Budget for the current fiscal, the government increased capex by 33 per cent to Rs 10 trillion. Around half of the budgeted capex has been allocated for roads and railways, two major steel-consuming areas.

Project completion in the real estate sector is also expected to be robust. The investments in infrastructure, renewables, and mining as well as within the steel sector itself (PLI), are expected to benefit the capital goods sector and with that, the demand for steel.

The consumption-driven steel-using sectors – automotive and consumer durables – are also expected to maintain healthy growth. The export potential will remain limited in the face of sluggish global demand. Nevertheless, growth will remain healthy in this subsector mainly due to the related growth in the automobile and capital goods sector.