India Clocks Double-Digit Surge In Steel Consumption Amid Global Slowdown

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New Delhi: India is the only large economy showing robust growth in the consumption of steel with a double-digit jump of 13.5 per cent in the first half of 2024-25, according to a statement of the Ministry of Steel issued on Wednesday. 

Even with a conservative demand growth of 10 per cent, the country will need 300 million tonnes of capacity by the year 2030 to cater to about 265 million tonnes of demand. If adequate domestic steel production capacity is not created, the country will become a net importer of steel and will depend on imports of steel for its infrastructure creation, the statement pointed out.

As per the National Steel Policy, the country aims to achieve 300 million tonnes of steel production capacity by the year 2030 with the present capacity at about 180 million tonnes.

This means an additional capacity creation of 120 million tonnes, which corresponds to investment of estimated $120 billion or over Rs 10 lakh crore.

This is possible only if the steel industry, both large and small, has adequate capital investment capacity and low steel prices, due to dumping of steel in the international market, will adversely impact the capacity creation objective of the country, the statement said.

India's steel imports have increased significantly for the first half of 2024-25 as compared to the same period last year.

While the steel imports for the first half of 2023-24 were 3.32 million tonnes, the imports have increased to 4.73 million tonnes this year, a 41.3 per cent increase.

While the overall volume of steel imports, as compared to total consumption in the country, is not significant, cheaper imports lead to depression of domestic steel prices and affect steel producers, both large and small, the statement explained.

According to the statement, of the 144.30 million tonnes of steel produced in the country in 2023-24, 58.93 million tonnes (40.84 per cent) was produced by over 1002 small producers and 85.37 million tonnes (59.16 per cent) was produced by the integrated steel producers. Hence, it is clear that the significant production in the steel industry is done by small producers spread over many clusters in the country who are equally affected by low steel prices.

The statement also said that the Bureau of Indian Standards (BIS) in consultation with the Ministry of Steel, has been taking steps to ensure that only quality steel is produced in the country or imported from outside.

As many as 51 BIS Standards covering 1,376 Grades of steel have been notified and have been covered by Quality Control Orders by the Ministry of Steel. This ensures that the steel produced domestically or imported from outside conforms to BIS standards and low-quality steel is neither produced nor imported.