Strong drivers of national growth

India’s global rank as steel producer

In 2017
 In 2018
3rd 2nd

India’s finished steel production (in million tonnes)

In FY 17
 In FY 18
101.81 104.98

India’s finished steel consumption (in million tonnes)

In FY 17
 In FY 18
83.90 90.68

Per Capita Steel Consumption

India’s per capita steel consumption in FY18 (in kgs) 68
Global per capita steel consumption in FY18 (in kgs) 220
China’s per capita steel consumption in FY18 (in kgs) 522.8
National Steel Policy target for India’s per capita steel consumption, 2030 (in kgs) 160

India’s steel export (in million tonnes)

In FY 17
 In FY 18
8.24 9.62

India’s per capita GDP (in US $)

In FY 17
 In FY 18
1751.85 1974.76

Government focus

National Steel Policy target for India’s steel-making capacity, 2030 (in million tonnes)

300

India’s steel capacity in FY18 (in million tonnes)

126

Booming automobile industry

Production of two-wheelers (in million tonnes)

In FY 17
 In FY 18
19.93 23

The evolution of the steel sector in India

There are a number of reasons why we are optimistic of our prospects across the foreseeable future.

One

India’s per capita finished steel consumption was a mere 68 kilograms, in contrast with the global average of ~220 kilograms, indicating a substantial room for improvement.

Two

steel output is expected to increase to 128.6 million tonnes by 2021, accelerating the country’s share of global steel production from 5.4% in 2017 to 7.7% by 2021. This is expected to be catalysed by the Indian government’s increased investment in infrastructure creation.

Three

The growth in steel consumption is now a part of the Central Government’s policy: targeted increase in per capita steel consumption to 160 kilograms (68 kgs today).

Four

India set to pip US as the second largest consumer of steel by 2019.

Five

some of India’s sectors are reporting robust growth.

Automotive: The automotive industry is forecast to grow from US$74 billion in 2015 to ~US$300 billion by 2026, necessitating a greater demand for steel. The Indian automotive components industry is expected to grow after-market sales from ~US$49 billion in FY2017-18 to US$100 billion by 2020.

  • Railways: India’s expansion of the dedicated rail freight corridor network via gauge conversion, line laying and electrification should increase steel demand.
  • Oil and gas: India is investing larger amounts in its oil & gas sector, expected to driver the demand for steel tubes and pipes.
  • Power: The Central Government has targeted a capacity addition of 100 gigawatts by 2022.
  • Rural development: Policies like Food for Work Programme, Indira Awaas Yojana and Pradhan Mantri Gram Sadak Yojana could drive construction steel demand in rural India.
  • Roads: Expenditure on new road projects over the next five years could be Rs. 6.92 lac crore over the next five years, an unprecedented high.
  • Airports: Estimated steel consumption in airport building is likely to grow at a rate of >20% over the next few years.
  • Infrastructure development: In the Union budget 2018-19, the Government of India allocated Rs. 5.97 lac crore for the sector. The infrastructure sector accounts for 9% of steel consumption and expected to increase to11% by 2025-26.
  • Capital goods: The capital goods sector accounts for an 11% share of cumulative domestic steel consumption and this is expected to increase to ~15% by 2026.
  • Consumer durables: The appliance and consumer electronics industry is expected to grow at a CAGR of 9% till 2022 to reach Rs 3.15 trillion, driving the demand for steel.