India steel industry grows on rising economic growth, infrastructure
India, the fourth largest producer of steel is aiming to come within top 2 on aggressive economic growth, governemnt promotion of the steel industry
MUMBAI (Commodity Online): India's steel industry will record a compound annual growth rate (CAGR) of close to 10% during 2010-13 thanks to upbeat economic growth in recent years and rising infrastructure investments.India is the fourth largest producer of steel in the world and is aiming for the number two position.
The country has acquired a central position on the global steel map with its giant steel mills, acquisition of global scale capacities by players, continuous modernization & up gradation of old plants, improving energy efficiency, and backward integration into global raw material sources. Global steel giants from across the world have shown interest in the industry due to its phenomenal performance. For instance - the crude steel production in India registered a year-on-year growth of 6.4% in 2010 and reached 66.8 Million Metric Tons, according to Research and Markets in their Indian Steel Industry Outlook to 2012.
This new research report Indian Steel Industry Outlook to 2012 says that the, Indian crude steel production will grow at a CAGR of around 10% during 2010-2013. Moreover, with the government proactive incentive plans to boost economic growth by injecting funds in various industries, such as construction, infrastructure, automobile, and power will drive the steel industry in future. The report also reveals that, steel consumption in India is expected to grow significantly in coming years as per capita finished steel consumption is far less than its regional counterparts.
India became the fourth largest producer of crude steel in the world in 2010 as against the eighth position in 2003 and is expected to become the second largest producer of crude steel in the world by 2015. India also maintained its lead position as the world's largest producer of direct reduced iron (DRI) or sponge iron.
Led by strong demand for autos and engineering services, the domestic steel demand in India remains robust, as per Moody's sectoral analysis on Asia's steel sector. According to the analysis, the outlook for the domestic operating environment is positive, driven by robust growth in infrastructure, autos and construction and constrains on additional supply by 2011.
Capacity for crude steel production expanded from 51.17 million tonnes per annum (mtpa) in 2005-06 to 72.96 mtpa in 2009-10. Crude steel production grew at 8.4 per cent annually from 46.46 MT in 2005-06 to 64.88 MT in 2009-10.
As per the latest estimates, the crude steel capacity in the country is likely to reach 120 MT by 2012 from 72.9 MT in the 2009-10.Meanwhile, Orissa, a major mining state in the country has acquired land and allotted 20684.06 acres of land to steel companies that have signed Memorandum of Understanding (MoU) with the state, the Orissa Government announced in March.