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India’s steel demand to grow by over 7% in FY19, FY20 on railways, capital

Indian Steel Association has forecast that India’s steel demand to grow by 7.1% in 2019 and by 7.2% in 2020. As for the financial year, the forecast for steel demand growth is 7.2% in both 2019-20 and 2020-21. It also forecast that India’s steel consumption is likely to cross 100 million tonnes mark in 2019. ISA said “Investment driven sectors such as construction, capital goods and railways are likely to maintain the healthy growth momentum driven by infrastructure programmes such as Bharatmala, Sagarmala, railway track electrification, dedicated freight corridors, metro rails, etc.

ISA added “In addition, while, reduction in GST rates will support the real estate demand, ongoing capacity additions in the renewable energy segment would continue to boost the electrical equipment demand.”

ISA said “The automotive sector is witnessing softer demand since last October. Going by the recent trend and a strong base effect, growth is expected to slow down in the first half of 2019. The steel industry expects demand from the automobile sector to revive in July due to pre-buying before the BS-VI norms kick in. Steel demand from the consumer durables sector is expected to normalise after a strong growth was logged last year. Among consumer durables, air-conditioner, washing machine and refrigerator sales were boosted by a cut in GST rates. The growth in both automotive and consumer durables sectors are expected to slow down to 7% each for the next two years from 16 per cent and 22% clocked last year. Intermediate goods, which is driven by both investments and consumption, will see some moderation in demand on account of weaker growth in the automotive sector.”

The World Steel Association had recently estimated steel demand in India to touch 103 million tonnes in 2019, against 96 million tonnes logged in 2018 and 110 million tonnes in 2020.
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