India aims to oust Japan as the world's second largest steel producer

Steel demand in India is gaining momentum amid extensive infrastructure construction.

Minister of Industry Secretary Aruna Sharma said: "We expect domestic consumption to increase over ten years, starting in 2020."

Currently, the annual capacity of all steelmaking plants in India is 126 million tons. According to forecasts, by 2021, the volume of production should increase to 150 million tons.

India is in the midst of a wave of urbanization that should boost demand for everything from copper and iron ore to steel.

“Consumption of finished steel in India rose 4.3 percent to 43 million tonnes in six months, while production rose 5 percent to 52 million tonnes,” said Industry Secretary Aruna Sharma.

India aims to increase steel production to 146 million tonnes by 2022, up from 118 million tonnes produced in Japan. An upbeat outlook for the industry amid record volumes, a rebound in prices and higher demand, prompted a surge in Indian stocks.

The country's stable capacity could provide an additional source of demand for leading mining companies including BHP Billiton Ltd., Rio Tinto Group and Fortescue Metals Group Ltd.