The perspective for steel demand and production growth in India has become the brightest in the Asian region, with not so promising forecasts about growth in China and the ASEAN region voiced during the 2022 SEAISI Steel Mega Event & Expo.
Arnab Kumar Hazra, deputy secretary general of the Indian Steel Association, has shared the projections for the growth in India in an online presentation on Monday, November 14.
Domestic steel demand in India is going to increase by 20 percent from 105.75 million mt in the fiscal year 2021-2022 to 127 million mt in 2025 and up to 170 million mt in 2030. Consumption growth is likely to peak beyond 2050, when it could reach 390 million mt, according to Arnab Kumar Hazra. This steel consumption forecast is supported by the expected sharp hike in construction, especially in the short and medium terms. Higher investments in railways, water infrastructure and affordable housing will be the major drivers of construction sector growth in India, according to the Indian Steel Association.
With the current expectations for demand, India is going to increase crude steel production to 212 million mt in 2030, compared to 120.3 million mt in the 2021-2022 fiscal year. Some market participants believe that the current expectations are too optimistic, but most market sources believe that India will post increases in demand and in production even despite challenges in the coming years, unlike China which is coming to at least a plateau and most probably will have to cut production capacities strongly in the long term (apparent steel demand until 2030 is expected to go down by 61 million mt, according to Dr. Karel Eloot from McKinsey & Company. Most market participants agreed that India and then the ASEAN region will drive global steel consumption by 2050.
However, the sharp capacity expansion in India is not expected to result in sharp export increases, at least this is not a part of the official strategy for the steel sector. Net exports are expected to increase to 23 million mt in 2030 and up to 35 million mt, versus 13.5 million in 2021-2022. Over the past five years, exports have been increasing by an average of 10.4 percent. Their share will increase first to 12 percent of total Indian finished steel production by 2030, while lowering to eight percent later in the longer term. If domestic demand posts lower than expected growth, the production plans will be adjusted accordingly.