Global Steel Industry Shifts Focus to India as Robust Economic Growth Drives Output

SEATTLE (Scrap Monster): India is projected to become the single largest driver of steel demand in the next 20 years. The country targets rapid acceleration in steel production growth, even in the midst of obstacles.

Currently, the country is the third largest steel producer in the world after China and Japan. Over the next few years, it is likely to overtake Japan also. It must be noted that, the country having managed to clock average steel production growth of 5.6% over the past five years, had surpassed the US in total annual production in 2015. The steel sector growth in the country is mainly on the back of strong economic growth and an array of infrastructure projects as part of the government’s development agenda.

The Indian Steel Ministry has taken several bold steps to safeguard the domestic steel sector. The imposition of minimum import price (MIP) on steel products, antidumping duties on select steel products and duties on metallurgical coke from Australia and China are only a few of such several measures aimed at lending support to ailing domestic steel sector. The government has also implemented stricter procedures for auctioning of coal and iron ore mines.

The country’s National Steel Policy for 2031 predicts that finished steel consumption in the country is likely to touch 230 million tonnes (Mt) by 2030. However, a more realistic projection by the CRU Group pegs steel consumption levels at 197 Mt, significantly higher by more than double when matched with the consumption of nearly 82 Mt in 2016.

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For the country to meet this increased consumption levels, it needs to build on its steelmaking capacities at a rapid pace, CRU report notes. The country may require approximately around 250 Mt of crude steel capacity to meet the projected demand in 2030. The Indian steel intensity is close to 61 kg per capita, which is much lower than China’s 647kg per capita. With similar population levels, there exists massive expansion potential for steel industry growth in India.