Last Update: December 27, 2022, 15:50 IST
Modi’s building boom established India as global steel protectorate
India emerges as a savior to ease global steel demand as China’s massive manufacturing sector is in trouble
India has emerged as a savior in flagging global steel demand, as China’s vast manufacturing sector is in trouble and the US and Europe slide into recession.
with India Set to overtake China as the world’s most populous country next year, the former is in the midst of a building boom. Prime Minister Narendra Modi Seeking to modernize roads, rail networks and ports in an effort to compete with China as a manufacturing hub.
According to Bloomberg, this is set to see a 6.7% jump in steel demand to around 120 million tonnes in 2023. world Steel Association, the highest growth among major economies. India, which saw a similar expansion this year, overtook the US a few years ago to become the world’s No. 2 steel consumer behind China.
Jayant Acharya, deputy managing director of JSW Steel Ltd., told Bloomberg that the nation-building phase of any economy requires a lot of steel and commodities. He said that India is passing through that phase in this decade and it can increase the country’s steel consumption to more than 200 million tonnes by 2030.
As per the report, the positive outlook of the steel sector has triggered a flurry of activity. ArcelorMittal Nippon Steel India Ltd, a joint venture between India’s Mittal family and the Japanese manufacturer, plans to more than triple capacity to 30 million tonnes in the coming decade. And, on the other hand, South Korean steelmaker Posco Holdings Inc. and Indian tycoon Gautam Adani, Asia’s richest man, are also exploring the possibility of setting up mills in the country.
India, the world’s second largest crude steel producer, registered an 11.4% increase in consumption of finished steel to 65.5 million tonnes during April-October. The country produces most of the steel it uses, according to government data, but it is also being forced to import more to meet the surge in demand. Inward shipments rose 15% from April to October to 3.1 million tonnes from a year earlier.
Flood of cheap steel imports – a concern
Bloomberg said Indian producers are becoming increasingly concerned about a flood of cheap imports as demand from traditional steel producers shrinks. Government data shows that China accounted for more than a quarter of imports in October, while some Russian steel is also reaching India.
The imports are of substandard quality, said AK Hazra, deputy general secretary of the Indian Steel Association, who has requested the authorities to look into the matter. “All we are saying is that the imports should be at competitive and international prices and the quality should comply with Indian standards,” he added.
Despite strong growth, India still lags far behind its rival Asian powerhouse in terms of total steel consumption. Next year’s demand will be less than a seventh of China’s 914 million tonnes, according to data from the World Steel Association.
How fast India can close the gap will depend on the success of PM Modi’s construction roll-out, the report said, with the finance ministry estimating a $1.4 trillion funding need for the national infrastructure pipeline by 2025. Will be
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