Local steel demand to grow 10% this year

The country's apparent steel demand will grow 10 per cent in 2006, thanks to the rising expenditure on infrastructure and construction. This is against the backdrop of the country witnessing a consistent growth of 7-8 per cent.

The expected growth rate in apparent steel consumption is the second best only after China's 14.4 per cent, according to an International Iron & Steel Institute forecast.

Apparent steel use reflects the deliveries of steel to the marketplace from producers as well as importers. These figures, however, may differ from the amount of steel actually being used with the difference being added to, or drawn from inventories.

According to the Brussels-based institute, domestic apparent steel demand will slow down to 9.1 per cent next year. Apparent steel consumption of China will also come down to 10.4 per cent on the back of stronger credit control and administrative measures introduced by the Chinese authorities.

The global apparent steel consumption for 2006 is pegged at 8.9 per cent and is expected to fall to 5.2 per cent level next year.

The domestic output in the eight-month period from January to August rose 15.3 per cent, as steelmakers produced 28 million tonne steel against 24.3 million tonne in the corresponding period last year.

The global steel demand is expected to rise at 4.9 per cent a year till 2010. During the same period, the demand in India and China is forecast to grow at 7 per cent a year and 8.4 per cent a year, respectively.

The rate for the rest of the world is pegged at 4 per cent a year. Projections for 2010-2015 suggest a 4.2 per cent yearly growth in steel demand for the whole world. For the same five-year period, demand growth in India will is estimated to reach 7.7 per cent a year and that in China 6.2 per cent per a year.

The national steel policy earlier laid a production target of 110 million tonne to be achieved by 2020. However, the steel ministry's recent statements have suggested that the target will be revised upward to about 200 million tonne.

The fact that Prime Minister Manmohan Singh recently said the country needed to invest $320 billion in five years to upgrade infrastructure bodes well for the domestic steel industry.