Steel Demand on the Rise: ICRA’s Revised Growth Forecast

SEATTLE (Scrap Monster): The domestic steel industry’s growth estimate for the current fiscal year has been revised upward by rating agency Icra to 9-10 percent, attributing this positive change to robust government capital expenditure. Initially projected at 7-8 percent, the steel industry’s growth outlook has improved due to strong government spending on infrastructure. The domestic steel demand has seen double-digit growth since FY2022, primarily driven by the government’s infrastructure-focused growth strategy, and this trend continues in the current fiscal year, with steel demand growing by 13.1 percent between April and August.

Jayanta Roy, Senior Vice-President and Group Head of Corporate Sector Ratings at Icra, highlighted that approximately 14.3 million tonnes per annum (MTPA) of new steelmaking capacity is expected to become operational in the current fiscal year, marking the largest capacity addition in recent history. The industry’s supply pipeline remains robust, with an estimated 12.3 MTPA of capacity scheduled for commissioning in FY2025.

Despite the favourable domestic operating environment, the industry faces challenges in the external environment. These include concerns about the Chinese housing market, a significant driver of global steel demand, and the possibility of lacklustre economic growth in Western economies. Consequently, while export opportunities for domestic mills have been limited, steel imports have increased as global steel trade flows have shifted to high-growth markets like India.

 Courtesy: www.manufacturingtodayindia.com