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Business News/ Economy / India’s steel use bucks global slump to rise 15% in first half

India’s steel use bucks global slump to rise 15% in first half

Infrastructure thrust drives consumption growth; steel production rises 13.6% in H1

The World Steel Association projected in April that Indian steel demand is expected to show a healthy growth of 7.3% in 2023 and 6.2% in 2024. (Bloomberg)Premium
The World Steel Association projected in April that Indian steel demand is expected to show a healthy growth of 7.3% in 2023 and 6.2% in 2024. (Bloomberg)

NEW DELHI : Domestic steel consumption grew strongly in the first half of the financial year in a clear signal that Indian manufacturing continues on a robust growth path despite global headwinds.

According to the latest steel ministry data, steel consumption in the April-September period of FY24 grew 15% to 64 million tonnes from the year-ago period. In H1 of FY23 too, steel consumption was robust, growing 11.5% to 55 mt rising from 49.7 mt in H1 FY21 when the country was in the grip of second wave of the covid-19 pandemic.

“Backed by government of India’s robust infrastructure programme, India’s estimated per capita steel consumption has jumped to 87 kg per capita in FY23 from 77 kg per capita in FY22," steel secretary Nagendra Nath Sinha told Mint earlier.

He said steel consumption also grew strongly by 13% YoY to 119.9m. The World Steel Association projected in April that Indian steel demand is expected to show a healthy growth of 7.3% in 2023 and 6.2% in 2024.

Graphic: Mint
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Graphic: Mint

“We expect that in FY24, Indian steel consumption will grow to 130-132 mt. I am confident India will achieve the target of 158kg per capita steel consumption by 2030-31 as set out in the national steel policy."

The consumption-led growth in the steel sector has been achieved with an equally good performance on production. Provisional data from Joint Plant Committee of the steel ministry indicates that domestic finished steel production in the six-month period of current financial year stood at 66 mt, up by 13.6% from 59 mt in the same period of previous year.

Last year, production growth was just 7.6%, but it has risen sharply in the current fiscal backed by demand from infrastructure sectors amid a pickup in activity after the government raised spending.

“Unlike the global economy witnessing a slowdown due to various geo-political situations, India has shown resilience and is moving ahead with the vision of the Prime Minister to make India a $5 trillion economy in the next 3 to 4 years," said Alok Sahay, secretary general, Indian Steel Association. He added that this, coupled with the supporting investment push, is keeping growth robust, driven mainly by infrastructure.

“The growth in infrastructure is leading to demand growth in the construction equipment’s machinery demand, electrical machinery, commercial vehicles, and other associated facilities. Major steel players in India have been investing in new capacities in line with the growing demand. Unlike the rest of the steel- producing countries like Korea and Japan who are export-dependent, Indian producers are focused on the domestic demand," he added.

To be sure, despite strong domestic demand, India has also become a net exporter of steel with the April-September data indicating the country exported 3.2 mt of finished steel. Though down 10% over same period last year, it remained higher than imports of 2.8 mt (up 13.4%) in the H1 period.

On the global front, crude steel production stood at 1256 mt in January-August 2023, registering a growth of 0.2% on-year, according to provisional data released by the World Steel Association. China remained the leader crude steel production with an output of 713 mt in the same period, a 2.6% growth.

India was the second largest producer of crude steel with an output of 92 mt in January-August 2023, showing a growth of 10.5%. Japan was the 3rd largest producer with an output of 58 mt, down 3.8%. With crude steel production of 54 mt (down 1.9% yoy), the US came in at number 4 while with 50.8 mt (up 3.9% yoy) was the 5th largest producer of crude steel.

Finished steel imports were valued at 26,923 crore whereas exports came in at 27,157 crore, putting the trade surplus for the category at 234 crore during April-September 2023.

Volume wise, HR Coil/Strip (1.031 mt) was the item most imported (36% share in total finished steel). Also, China (0.918 mt) was the largest import market for India.

HR Coil/Strip (1.208 mt) was the item most exported (37% share in total finished steel). Italy (0.678 mt) was the largest export market for India.

In a bid to become self-reliant and support India’s growing economy, the steel production capacity is set to increase from the current 126 million tons to 255 million tons by 2030 and eventually to 425 million tons by 2047, according to the steel ministry.

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Published: 25 Oct 2023, 10:50 PM IST
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