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[Ferro-Alloys.com]Forecast: The Indian Steel Association has forecasted India’s steel demand to grow by 7.1% in calendar year 2019 and by 7.2% in calendar year 2020.
As for financial year, the forecast for steel demand growth is 7.2% in both 2019-20 and 2020-21.
The major highlight is that India’s steel consumption is forecasted to cross 100 million tons in 2019.
Background Economy:
Indian economy witnessed a strong growth of above 8% during first half of 2018, however, the economy slowed down in the second half of 2018, primarily due to the weaker rural sector. In addition, high oil prices combined with a weakening rupee dampened the demand in general.
Going forward, while, stable investment growth with gradual pickup in private investment would continue to support the economy, consumption growth is expected to improve driven by measures for farmers, unorganized sector and government employees. Cumulatively, Indian economy is likely to maintain above 7% growth in next couple of years.
Background Steel Using Sectors:
Investment driven sectors such as Construction, Capital Goods & Railways are likely to maintain the healthy growth momentum driven by infrastructure programs such as Bharatmala, Sagarmala, Railway track electrification, dedicated freight corridors, metro rails, etc. In addition, while, reduction in GST rates will support the real estate demand, ongoing capacity additions in renewable energy segment would continue to
boost the electrical equipment demand. Construction sector growth is estimated to be at 6.8-7.2% in the next couple of years, whereas Capital Goods & Railways sectors are projected to grow by 6.4-6.8% and 6-6.5% respectively for the same period.
Amongst the consumption driven sectors, automotive and consumer durables have clocked ~16% and ~22% growth respectively in 2018. However, automotive sector is witnessing softer demand conditions since Oct-Nov 2018. Going by the recent trend, and a strong base effect, growth is expected to slow down in the first half of 2019. However, revival is expected in the 2nd half of the year with pre-buying before BS-VI implementation and improvement in consumption growth. On the other hand, growth for consumer durables sector is projected to normalize from a strong growth in 2018, which was mainly driven by GST reduction in AC, washing machine & refrigerators. Both automotive and consumer durables sectors are estimated to grow at near 7% in next couple of years
Intermediate goods which is driven by both investments and consumption will see some moderation in demand on account of weaker growth in the automotive sector, however, pipes and other packaging materials will continue to grow at a stable pace. Overall the sector is likely to grow by 6-6.5% in next couple of years.
Source：Indian steel Association
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- [Editor:tianyawei]
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