Indian domestic steel demand is poised to grow by 7-8 percent in the fiscal year 2022-23 and the industry outlook has remained positive, rating agency ICRA said in its latest industry report on Thursday, April 14.
Industry capacity utilisation levels will be around 80 percent in the fiscal year 2022-23 after a gap of eight years and buoyed by prospects of large infrastructure spending plans, domestic steelmakers have announced a sizeable capacity expansion accumulating to about 34 million mt per year expected to go on stream by the fiscal year 2025-26, the ICRA report said.
Domestic steel demand registered a healthy sequential growth from December 2021 as construction activity gathered momentum which, coupled with the low base in the fiscal year 2020-21, helped close the fiscal year 2021-22 with a double-digit growth of 11 percent, a feat achieved last in 2010-11, the report said.
However, the main downside to the positive outlook emanates from the sharper-than-expected rise in the US Federal Reserve interest rates, the further escalation of Russia’s attack on Ukraine keeping raw material supplies under pressure, or a significant deterioration in the Chinese housing sector, all of which have the potential to materially impact global demand in the coming quarter, the report said.