India's steel output growth slows to 2.8% in Jan-Oct at 66 MT

Hit hard by the slowdown in economy, India's steel production growth eased to just 2.8% in January-October this year but the country faces no immediate threat of being dislodged from its position as the fourth largest steel producer globally.

Global industry body World Steel Association (WSA) data today showed India produced 66.387 million tonnes (MT) steel during the first ten months of the current year compared to 64.556 MT in the same period last year.

The growth in production during January-October period of 2012 at 64.556 MT was 5.6% higher than 61.077 MT output recorded during the corresponding period of 2011.

Industry officials blame the subdued steel production growth to slow expansion of the economy.

Economic growth of a country has a direct bearing on steel production. The usage of steel often mirrors the health of an economy and usually rises by 1.5 times of the country's GDP growth rate.

The economic growth rate slipped to decade's low of 5% in 2012-13 and during the first quarter of current fiscal it stood at 4.4%. The growth figures for the second quarter are scheduled to be announced on November 29.

The feeble economic growth appears to have impacted steel-consuming segments like real estate and consumer durables, which are the major consumers of the alloy.

India's steel output growth at 2.8% in the first 10 months of the current year compares with 3.2% average growth recorded worldwide. China's steel industry saw its output grow by 8.3% in the same period.

World's steel production stood at 1,321 MT and China's 884 MT during the same period.

Amid the slowing steel output, data suggests that India is unlikely to be dislodged from its fourth largest global producer tag, which it has been holding for some years now. Its immediate competitor for the position, Russia, is close to 10 MT away.

No change in the top four of the global order is also likely soon. China, which is miles ahead from the second best, Japan, is expected to retain its numero uno position. Japan so far has produced 90 MT. US is also expected to retain the third position. It has produced 73 MT steel during the January-October period of the current year.