Posted on 10 Oct 2014
Domestic
steel makers, who are facing subdued offtake, have something to cheer about now
as a premier global industry association has projected India's steel demand to
grow at 3.4 per cent during the current year.
World Steel Association (WSA), in its short-range demand outlook, has pegged
demand growth for the next year even higher at six per cent, a significant rise
as compared to 1.8 per cent in 2013.
"India's outlook is improving following the election of a new government
which is promising pro-business reforms. In 2014, India's steel demand is
expected to grow by 3.4 per cent to 76.2 million tonnes in 2014, following a
growth of 1.8 per cent in 2013," WSA said today.
"In 2015, structural reforms and improving confidence will support a
further six per cent growth in steel demand but elevated inflation and fiscal
consolidation remain key downside risks to the outlook," it added.
In its April outlook, WSA had projected 3.3 per cent growth in steel demand for
India in 2014.
Moody's Investor Service had in August said steel consumption in India would
pick up once the government's infrastructure spending policies are put in
place.
Continuing with subdued consumption trend for the last couple of years, India's
steel consumption grew by just 0.3 per cent to 31.17 million tonnes (MT) during
the April-August period of 2014-15.
A S Firoz, Chief Economist, Joint Plant Committee (JPC), a body under the Steel
Industry, recently said consumption of steel would certainly rise in India as a
lot of infrastructure projects are already in the pipeline and that was why his
assessment of three per cent growth was "not a tall order".
"Besides, the automotive sector is reviving which will certainly pull the
demand up. Capital goods sector and lot of machinery sector have also potential
to do well. So, all these will pull demand," he had said.
Construction sector accounts for around 60 per cent of the country's total
steel consumption while automobile sector consumes 15 per cent. Both sectors
have been plagued by a slowdown in the economy.
WSA forecasts that the global apparent steel use would, however, nearly be
halved at two per cent in the current year from 3.8 per cent growth recorded
last year mainly due to slowdown in Chinese demand. The growth rate for next
year would remain static at two per cent in 2015 to reach at 1,594 MT.
