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Indian steel industry: Key stats

Sep 15, 2008

In last article, we have seen the key stats of the Chinese steel industry, let us see the same for India, which has emerged among the top five steel producing and consuming countries over the last few years, backed by strong growth in its economy. Capacity: Steel capacity increased by 6% to 60 m tonnes in FY08. It registered a robust growth of 8% CAGR between the period FY04 and FY08. The capacity expansion in the country was primarily through brown field expansions as it requires lower investments than a greenfield expansion.

  • Also read capacity addition scenario and financial arithmetic

    Production: Steel production has registered a growth of 6% to reach a level of 54 m tonnes in FY8. The production has grown nearly in line with the capacity expansion and registered a growth of 7% CAGR with an average capacity utilization of 92% between the period FY04 and FY08. India is currently the fifth largest producer of steel in the world, contributing almost 4% of the total steel production in world. The top three steel producing companies (SAIL, Tata Steel and JSW Steel) contributed around 45% of the total steel production in FY08.

    Consumption: Steel consumption has increased by 10% to 51.5 m tonnes in FY08. Consumption growth has been exceeding production growth since past few years. It grew at a CAGR of 12% between FY04 and FY08. Construction & infrastructure, manufacturing and automobile sectors accounted for 59%, 13% and 11% for the total consumption of steel respectively in FY08. Although steel consumption is rapidly growing in the country, the per capita steel consumption still stands at 48 kgs. Moreover, in the rural areas in the country, it stands at a mere 2 kg. It should be noted that the world’s average per capita steel consumption was 189 kg and while that of China was 309 kg in 2007.

    Trade equations: India became net importer of steel in FY08 with estimated net imports of 1.9 m tonnes. In the past few years, its exports have remained at more or less the same levels while on the other hand, imports have increased on the back of robust demand and capacity constraints in the domestic markets. The imports showed a growth of around 48% while exports declined by around 6% in FY08.

    Outlook: As per IISI estimates, the demand for steel in India is expected to grow at a rate of 9% and 12% in 2008 and 2009. The medium term outlook for steel consumption remains extremely bullish and is estimated at an average of above 10% in the next few years.

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