Steelmakers in India hope to increase demand for metal

Steel consumption in India rose only 1.3% to 33.74 million tons (MT) from April to August. The current capacity of the industry is about 115 million tons.

India's first three steel leaders Tata Steel Ltd, SAIL and JSW Steel Ltd are adding new capacity in stages. Analyst at brokerage Emkay Globa believes that demand in the sector will be able to catch up with supply if its growth rate doubles in the remainder of fiscal 2017, which looks unlikely given the expansion of capacity.

“Last year, imports captured all of India's growth in steel demand,” said Prakash Singh Kumar, chairman of SAIL. Singh is confident that demand will rise with the recovery in the construction sector, the expansion of roads and railways, and the strengthening of defense and heavy engineering. "India is the only bright spot where demand is expected to grow by 5% in the years 2016 -2017."

JSW reiterated its forecast of 25% growth in crude steel volumes to 15.75 million tonnes per year, and sales of commercial steel by 15 million tonnes for fiscal 2017. The company expects to have a steelmaking potential of 40 million tonnes per year by 2025.