Indian steel mills continue to ramp up capacity, although domestic consumption is projected to lag behind current production of 138 million tonnes per annum for at least the next two fiscal years, increasing the risk of oversupply, especially if negative steel demand trend in India will continue.
Indian finished steel demand is expected to grow 7 percent annually to about 104 million tonnes in April 2019 - March 2020 and another 7 percent to 111 million tonnes in 2020-21, according to Priesh estimates. Ruparelia, a steel analyst at the Indian rating agency Icra Ratings.
India's finished steel production exceeds consumption in 2018-19. Production on an annualized basis increased by 3.8 percent to 131.72 million tons, while demand increased by 7.5 percent to 97.51 million tons. Steel capacity utilization was about 77 percent in 2018-19, an increase of 3.3 percent per year, according to India's Ministry of Steel.
India's steel production is expected to rise to 143 million tonnes by March 2020 and 148 million tonnes by March 2021, according to Ruparelia's estimates.
India's third largest steel mill, JSW Steel, is increasing its total capacity by 6 million tons per year from the current 18 million tons per year. Tata Steel projects an increase in steel production in India to 23.6 million tonnes a year over the next five years, from 12 million today. The state-owned company SAIL completed a ten-year expansion in 2018 with the aim of increasing capacity from 14 to 21.4 million tons per year.
India's Steel Ministry has set a target to produce 300 million tonnes a year by 2030-31, as it expects demand to accelerate amid rising infrastructure spending and the development of the manufacturing sector.
