Government impetus
The Government of India is aiming to scale up steel production in the country to 300 MT by 2025 from current levels. The Government’s various policy reforms underpin a constructive medium term demand outlook.
Some of the focused initiatives in the sector comprise:
Future growth prospects
India’s per capita consumption of total finished steel has risen from 51 kg in FY 2009-10 to about 59 kg in FY 2014-15. India produced 89.8 MT crude steel in FY 2015-16, a marginal increase of 0.9% since last year. In FY 2015-16, India consumed 80.5 MT of finished steel. Finished steel consumption growth stood at 4.5% in FY 2015-16. The country witnessed an unprecedented inflow of steel imports at predatory prices, which saw a significant increase in the last fiscal. However, the imposition of minimum import price on various steel products has provided some relief.
Increasing infrastructure investments, rapid growth in the industrial sector, rise in urban population, and emergence of the rural market for steel have the potential of raising the per capita steel consumption in the country. India’s steel sector contributes nearly 2% of the country’s gross domestic product (GDP) and employs over 6,00,000 people. India’s steel demand is showing signs of a rebound after the slowdown of the last two years. Cyclicality may be at work, but key demand trends are encouraging.
Steel scenario
Source: JPC and JSW Steel All figures are in million tonnes *Apparent finished steel consumption net of double counting effect