Indian Steel Association (ISA) forecasts a 7.5% increase in steel demand in FY2023-24 to 128.85 million tons, driven by high infrastructure spending.
The Association also expects steel demand growth by 6.3% to 136.97 million tons in fiscal year 2024-25.
The World Steel Association predicted growth of 7.3% in 2023 and 6.2% in 2024 in India in its April short-term outlook.
Indian finished steel consumption increased by 12.7% year on year to 119 million tonnes in 2022-2023, while crude steel production rose up 4.2% year-on-year to 125 million tons, according to preliminary data from the Joint Committee on Plants of the Ministry of Steel.
“The rising share of investment in GDP, underpinned by significant government capital spending and improved private investment, will stimulate the development of the construction sector, railways and capital goods,” the association said in a statement.
It is expected that the Indian government’s measure to sharply increase capital spending in the union budget for 2023-2024 will contribute to the development of road and rail infrastructure, and increased investment in public housing projects will boost steel demand this year, the ISA said.
In addition, steel demand will also receive a boost from investment in infrastructure, renewable energy, mining, as well as the metals sector through a manufacturing-related stimulus scheme.
The association expects automotive and consumer durables to maintain healthy growth, but sees sluggish global demand as limiting the potential of the export sector.