After a timid 2010, the Indian steel industry is set to lead growth with double-digit rates in the next two years, the World Steel Association has said. India's steel consumption is expected to grow by over 13% in 2011 and accelerate further to over 14% in 2012, which would enable it to emerge as the world's third-largest steel-using nation after China and the US.
The world's largest steel making country China, which also had a below-par year in 2009, will continue to cool off in 2011 and grow only 5%. In 2009, India's steel consumption grew by only 8% against the global growth rate of 13.2%.
Global steel consumption is expected to grow by 5.9% this year to 1,359 million tonnes against 13.2% growth achieved in 2010. Though there has been a gradual revival in demand in developed markets, the use of steel in the developed world would still be 14% below the pre-recession levels of 2007. However, growth in emerging and developing economies at 38% is likely to more than make up for it.
"India is expected to show strong growth in steel use in the coming years due to its strong domestic economy, massive infrastructure needs and expansion of industrial production," said Daniel Novegil, chairman, worldsteel economics committee. "However, it is expected that the Chinese government's efforts to cool down the overheating economy, particularly the real estate sector, will impact Chinese steel demandsomewhat later this year."
"The Indian economy has recorded an impressive GDP growth in recent years. Expansion of infrastructure and growth in industrial production are obvious consequences, which lead to substantially higher demand for steel," said CS Verma, chairman, Steel Authority of India Ltd, the country's largest steel producer. "There is a large potential for steel consumption in the rural sector, where per capita steel consumption is still quite low, and we expect the Indian market to grow to over 200 million tonnes by 2020 and to about 500 million tonnes by 2050."