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Country's largest steel maker SAIL has said it expects the domestic demand for the metal to grow by 7-8 % this year, although prices may hover at the current level.
"If you see the demand for the first four months of the current calendar year, year-on-year basis globally, even in China, even in India, it is better than the corresponding period of last year, Steel Authority of India Chairman C S Verma told PTI.
"In India, demand has to be definitely more than 6 %, because our GDP growth is projected to be 6.2 %. So, the growth in steel demand has to be 7-8 %," he added.
Demand for steel in any economy generally grows by 1.1-1.2 times of the GDP. However, this was not the case for India in last fiscal.
During 2012-13, although the economy expanded by an estimated 5 %, India's steel demand grew by just 3.3 % due to a host of factors including a stubborn inflation and RBI's tight monetary stances to rein that in.
According to World Steel Association, the leading global industry body, the rate of growth in demand for the last calendar year was just 2.5 %.
The 3.3 % growth in consumption was the slowest in last three years, according to figures revealed by Joint Plant Committee, a body under the Steel Ministry. It grew by 5.5 % in 2011-12 and 9.9 % in 2010-11.
World Steel Association, the leading industry body, has forecast that India's steel demand will grow by 5.9 % to 75.8 million tonnes in 2013."In India, steel demand is expected to pick up and will grow by 5.9 percent to 75.8 million tonnes in 2013 following 2.5 percent growth in 2012 as monetary easing is expected to support investment activities," it has said in a recent report.
In 2014, growth in steel demand is expected to further accelerate to 7 %, thanks to reform measures aimed at narrowing the fiscal deficit, coupled with measures to improve the foreign direct investment climate, WSA added.
Earlier, private sector major Tata Steel's Managing Director H M Nerurkar had also said: "We expect this year, it (demand) should be somewhere between 6-8 %. This is because the economy is expected to grow at 6 %, so the steel demand would grow by at least 6-8 %."
The SAIL Chairman, however, is not that bullish on steel prices. He expects that it will remain at the present level for the current year."Steel price will hover at the same level at what they are prevailing now. I don't expect decline in the prices. I don't expect massive increase in the prices. They will remain range-bound," Verma said.
