India’s domestic steel demand is poised to grow by double-digits in 2023-24, for the third consecutive year, having already notched a growth of 13 percent in the first five months of the year, rating agency Crisil said in a sectoral report on Wednesday, September 13.
The report said that front-loading of central government capital expenditure implies demand will taper in the second half but still over the entire fiscal year Crisil expects demand to grow by 10-12 percent and this would exceed 11.4 percent and 14 percent growth achieved in the fiscal years 2021-22 and 2022-23.
Domestic steel prices are expected to more or less hold up this fiscal year at an average of INR 59,000/mt ($711/mt) for flat products and INR 56,000/mt ($675/mt) for long products despite the slowing global economy. Smoldering domestic demand will prevent a slide in the local market despite the production-related dynamics in China, Crisil said.
The infrastructure segment accounts for an estimated 30 percent of total steel consumption in India. In the past five fiscal years, infrastructure capital expenditure (central and state combined) logged an 18 percent compound annual growth rate, while the first quarter growth of 60-65 percent in this fiscal year is way above past trends. With annual growth in infra capex (central + states) expected at around 25 percent this fiscal year, domestic steel demand has great support, the rating agency report said.