Indian steel sector has entered a new phase of development; demand for steel will continue to grow: MoS, Steel
The government has estimated the country's steel output to hit 128.6 million tonne (MT) by 2021 and consumption of the same to reach 140 MT by 2023, on the back of investments in infrastructure, construction and automobile sectors, according to the Economic Survey 2018-19.
Crude steel production in 2018-19 stood at 106.56 MT, a growth 3.3 per cent over 103.13 MT in 2017-18, said the Survey, tabled by Finance Minister Nirmala Sitharaman in Parliament on Thursday.
Currently, India's per-capita consumption stands at only 69 kg, compared with the global average of 214 kg, it said.
"It is estimated that the steel production in India will reach 128.6 MT by 2021 and its consumption will increase to 140 MT by 2023.
"With huge investments in infrastructure, construction and automobile sector, steel demand and corresponding consumption is growing at an average of 7.4 per cent. This will lead steel production to go up to 255 million tonnes by 2030 and per capita steel consumption to 160 kg," it said.
Under the National Steel Policy 2017, the government aims to ramp up steel-making capacity to 300 MT, while production at 255 MT and consumption to 160 kg by 2030.
The Survey said the policy gives broad policy directives to the industry for encouraging long-term growth for Indian steel on both supply and demand fronts.
It said the policy envisages focus on domestic production especially of value-added steel in order to meet the growing demand, while adding there is a need for investment in capacity addition and infusion of modern technology for production.
It is estimated that 1.4 tonne of iron ore, 0.6-0.7 tonne of coking coal and around 0.2-0.3 tonne of fluxes can be saved from recycling of one tonne of steel scrap and thus indirectly will reduce the production which saves around 16-17 per cent of energy, it said.
The Survey further said the domestic steel sector faced a number of issues in 2018-19, such as dependence on imported coking coal and import of high-grade steel.
"Some of the key challenges faced by the Indian steel industry are capacity expansion as the demand for steel is bound to rise with economic growth. High grade and value-added steel are used in power, defence and automobile which is currently imported.
"Difficulties in acquiring mining lease and high dependency on import of coking coal add to cost of steel production. High logistics costs also act as a major constraint," it said.
In the global scenario, the Survey said 2018-19 witnessed weakening of steel market fundamentals, and increase in trade friction with imposition of protectionist measures by the US and China, among other issues.
Pursuant to the imposition of trade restrictive measures by the US, the European Union and Canada, India's exports have declined.
The total exports, with the highest volume of 9.62 MT in 2017-18, fell to 6.36 MT during 2018-19.
On the other hand, imports have gone up particularly from South Korea, Japan and ASEAN countries.
India remained an importer of finished steel at 7.84 MT during 2018-19 as against 7.48 MT during 2017-18.
According to estimates, the steel sector directly contributes 1.4-2 per cent to India's GDP and its weightage in the official Index of Industrial Production is 7.22 per cent and accounts for 7.53 per cent of the Wholesale Price Index.
India is the second-largest producer of crude steel in the world after China, and third-largest consumer of the finished steel after China and US.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)