India is set to pip the United States as the second largest steel consuming country in the world next year. China, the largest market for steel, will remain on top with an estimated consumption of 781 million tonnes.
According to a World Steel Association forecast, the usage of finished steel product in the country is expected to touch 102.3 million tonnes in 2019, up from an estimated 95.4 million tonnes this year, registering a year-on-year growth of 7.3 per cent. The country recorded steel usage of 88.7 million tonnes in 2017.
The steel consumption in the US is projected at 101.2 million tonnes next year, up from an estimated 99.9 million tonnes this year.
“As the shocks of demonetisation and implementation of GST retract, the outlook for the Indian economy is improving. Steel demand is expected to show high growth driven by revival in investment and healthy consumption. The steel demand in the country has almost doubled in the last decade and is now very close to overtake the US, if current outlook stays,” Adam Szewczyk, head economic and statistical analysis of World Steel Association, said at a conclave on Capital Goods for Steel Sector: Manufacture in India, which was organised in Bhubaneswar. India’s steel demand is set to go up in short and medium terms owing to favourable macroeconomic conditions and ambitious reforms agenda, he added.
Low per capita steel use in India — about 70 kg compared with the world average of more than 200 kg — and structure of steel use, with dominating construction typical for developing nations, leave a lot of room for development.
World Steel Association’s state-wise steel demand study for India, in collaboration with the Indian Steel Association, has identified growth in the construction sector as a pan-India phenomenon, driven by infrastructure spending and demand for housing.
Similarly, projects such as industrial corridors and Sagarmala will increase connectivity in India. Smart cities will also accommodate growing needs for urbanisation.
Stating that the industrial and freight corridors supported by the Make in India programme will aid further development of steel-intensive sectors, he added that numerous states are expected to develop auto and ancillary industries, making India a global auto hub for small cars, with focus on exports.
In several states, there is also a huge need to strengthen their existing mechanical machinery sector. All of these would contribute to rise in steel demand in India in the future, he said.