India steel demand to increase on infrastructure growth

India steel demand to increase on infrastructure growth.

India steel industry demand is set to rise further on growth in automobile, power, constructure and infrastrcuture sector. India has a lower per capita consumption of steel compared to other leading nations and therefore there is tremendous room for further demand growth as the economy expands, according to a report titled 'Indian Steel Industry Outlook to 2012' released by RNCOS. The report pointed out that finished steel is also getting new applications due to its corrosion resistive property. Additionally, housing demand and developments is expected to account for more steel consumption in the country, growing at a CAGR of around 12% during FY 2012 - FY 2014.

RNCOS report said that metal products are the largest consumer of stainless steel among different industries. Besides, infrastructure accounts for the maximum steel consumption among the industry segments. Moreover, demand from other industries, such as process, and engineering are expected to grow in the coming years on the back of various factors covered in our report.

Recently, Beni Prasad Varma, India Minister of State for Steel said that there is no target fixed by the government for production of steel by the individual steel units, as the steel sector is deregulated and the production is driven by the market demand and production capacity.

The crude steel production in the country for 2009-10 is 65.84 million tonnes and for the period between April to January of 2010-11, it is 57.72 million tonnes. The crude steel production in the country is likely to increase in the average range of 8-10% rate at least for the next decade, on account of rising trend of steel demand in the country.

He said, currently, India is the 5th largest steel producer in the world as per the press release of the World Steel Association (WSA). However, the country has the potential to become the 2nd largest producer of steel globally, on account of growing steel demand, rich resources base of iron ore, skilled manpower and vast experience of steel making and the huge capacity expansion planned and being executed in the steel sector. Production of finished steel in the country, during April-January period of current financial year 2010-11 has recorded an increase of 8.4%, whereas the consumption of finished steel has shown an increase of 10.9%.

The Minister said, the role of the Government in a deregulated environment like steel is to provide a conducive policy environment and act as facilitator for rapid growth of steel industry. The decisions related to investment and productions are taken by the individual companies based on commercial considerations.