Steel Demand In India To Grow At 8.6% In 2023: World Steel Association

The association further projected that global demand for steel would increase by 1.8 per cent in 2023 and touch 1,814.5 million tonnes (MT).

The association noted that steel demand has been impacted by high inflation and interest rates.

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Steel demand in India is estimated to grow at a healthy pace of 8.6 per cent as compared to the overall global increase of 1.8 per cent in 2023, the World Steel Association said on Tuesday. The association further projected that global demand for steel would increase by 1.8 per cent in 2023 and touch 1,814.5 million tonnes (MT). Notably, global steel demand dipped by 3.3 per cent in 2022. 

The association (worldsteel) stated that in 2024, global steel demand would increase by 1.9 per cent to 1,849.1 MT, reported PTI. The global steel body noted that steel demand in India is expected to grow 7.7 per cent in 2024.

The body further noted that the Indian economy continued to remain stable in the face of pressure from the high interest rate environment, and the steel demand is further estimated to maintain it’s high growth momentum. India’s construction industry’s growth is being led by government spending on infrastructure and a recovery in private investment, the association noted in it’s Short Range Outlook (SRO). The capital goods sector is expected to grow on account of investment in infrastructure. 

The report stated that the automotive sector is set to witness a healthy growth momentum, while the consumer durables sector remains to be the only one underperforming due to the surge in inflation/interest rates that limit discretionary spending. However, this sector is expected to display improvement in 2024 due to the festive season spending and development in the production linked investment (PLI) schemes. 

Maximo Vedoya, worldsteel Economics Committee chairman, added that steel demand has been impacted by high inflation and interest rates. Since the latter half of 2022, steel-using industries have reported sharp decline in activities across sectors and regions as investment and consumption dampened. This momentum has carried on in 2023, specifically impacting the US and EU. Keeping in mind the delayed effect of the stringent monetary policy, worldsteel estimated that steel demand recovery in 2024 would be slow in advanced economies.

The emerging economies are estimated to grow at a faster rate than the developed ones, the association noted. Vedoya noted, “We expect the situation in China's property market will stabilise in the latter part of the year and its steel demand will record slight positive growth thanks to government measures. The 2024 outlook for China remains uncertain depending on the policy directions to tackle the current economic difficulties. We note that the Chinese economy is in a structural transition phase that may add volatility and uncertainty. Other uncertainty is linked to regional conflicts and unrest such as in Russia and Ukraine, Israel and Palestine, and elsewhere. This could contribute to rising oil prices and further geo-economic fragmentation, both of which are downside risks.”

He further added that in spite of the dampening in construction activities due to surging interest rates, investment in infrastructure has displayed positive momentum in many regions, even in advanced economies, indicating the impact of decarbonisation efforts.