Steel Consumption

Domestic steel consumption is likely to witness 9-10 per cent growth this financial year, rating agency ICRA said on Thursday. The demand for steel was robust in the first quarter of the ongoing financial year with consumption growing at a rate of 15 per cent on a year-on-year basis amidst competitively priced imports. "ICRA projects the domestic steel consumption growth at a healthy 9-10 per cent in FY2025," the rating agency said in a statement. Demand may record some sequential slowdown in the current quarter as it is seasonality associated with monsoon, following which government capex may display a back-ended pick up. "ICRA expects the industry to witness capacity utilisation at a decadal high of 88 per cent in spite of an all-time-high capacity addition of 15.6 MTPA (million tonnes per annum) in FY2025 as well as the surge in imports," the rating agency said. For the last three years, the steel sector is going through the fastest period of growth witnessed since the global .

Domestic steel consumption between February to April 2024 registered a growth of 11.3 per cent

The world's second-biggest crude steel producer remains a bright spot globally with robust demand from its construction and automotive sectors

With most large steel-consuming hubs globally facing subpar economic activities in the near term, global steel trade flows have been increasingly redirected to high-growth markets like India

Offtake is expected to jump to 111 million tonnes in CY2022 after a severely impacted year CY2020 which saw consumption falling to 89.3 million tonnes, said Care Ratings in a recent report

Some have temporarily shut down units in the wake of rising Covid cases, but at least three major suppliers to the auto industry said the move was unlikely to impact negotiations

Contraction in domestic steel consumption has been much lower at 9.9% in 11M FY2021 compared to a 19.6% drop during 8M FY2021 on the back of a sharp pullback in demand during December 2020 and January

The agency further noted that consolidation in the Indian steel sector that began in 2018 will continue in 2020

Although the downturn is led by consumer and service sectors, massive dislocations in spending, labour markets, and confidence are fuelling declines in steel-using sectors, the global body said

Infrastructure steel consumption has not picked up yet. Some steel consuming segments like auto have started their production. Full revival will take some time, says Dilip Oommen

India will be adding 20 mt of annual capacity in the next five years

The S&P BSE Metal Index has also plunged about 30% so far this year

More than margins, supplying to the auto segment keeps the steel industry future-ready

Consumption of finished steel has increased by 4.2% on a year-on-year basis to 13.8 million tonnes