Steel sector in India is projected to grow 6-9% in the current year due to the recovery in construction, automobile and real estate sectors from the economic meltdown.
As per the statement from the finance ministry, India’s steel sector is expected to attain a growth of 6-9% in 2010, reported
moneycontrol.com.
During the period spanning from April 2009 to January 2010, steel consumption surged 7.9% to 45.93 Million Tonnes as compared to the corresponding period in 2008-09, a fiscal whose second half saw more than 50% decline in demand and prices of the commodity.
Production of finished steel rose 3.8% in April-December 2009 while 7.7% increase in real consumption was registered in the same period. Moreover, exports declined 36% whereas imports surged 16.6% in that period.
Increased demand from construction, real estate and automobile sectors were the key reasons leading to the steel industry growth in India. As all these sectors have resumed growth after the financial turmoil, it is quite likely that they will stimulate the growth in steel industry also.
Most importantly, government is lending its full support to the steel sector. This is clear from the recently presented 2010 budget, in which the government has decided to increase the outlay on urban development and housing to Rs 5,400 Crore (up 75%). An additional 25% of plan outlay for rural infrastructure has also been announced. This is being seen as a stimulus for domestic steel companies. Infrastructure growth will certainly lead to the growth of the steel sector.
It is noteworthy that per capita steel consumption in India is still around 40 Kg as compared to 100 Kg in Brazil, 250 Kg in China and a world average of 198 Kg. Thus, the country has huge scope for increasing its steel consumption.
A leading market research firm
RNCOS has projected in its industry research report titled “
Indian Steel Industry Outlook to 2012” that all these supporting factors will help the finished steel consumption in India to grow more than 65 Million Tonnes in 2011-12.
Realizing the growth potential of the Indian steel market, a Research Analyst at
RNCOS stated that the market is attracting foreign players, who are expected to tie with domestic firms to gain a foothold in the second fastest growing economy in Asia. Also as the recent budget includes additional plans for rural infrastructure, industry players should concentrate on these areas to garner higher profits.”
Related Market Research Reports:
US Steel Industry Outlook
UAE Steel Industry Analysis
China Steel Industry Forecast till 2012 
