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Steel consumption in India, the world's third-largest user, grew at the slowest rate in four years as a faltering economy and lack of spending on cars and infrastructure projects eroded demand.
Steel use in the year ended March 31 is estimated to have risen 3.3 per cent to 73.3 million tons from a year earlier, according to initial data on the steel ministry's joint plant committee website. Production rose 2.5 per cent to 77.6 million tons.
Steel demand growth was less than half of the Indian government's eight per cent estimate as home and car buyers delayed purchases. The economy grew five per cent in the year ended March, the slowest pace since 2003. Car sales fell for the first time in a decade, prompting producers to cut costs.
"This is a negative surprise -- way below what we expected," said Abhisar Jain, an analyst at Centrum Broking in here, who expected consumption to grow about five per cent to 5.5 per cent."Subdued car sales, lack of government spending on steel-intensive infrastructure projects could have triggered the worse-than-expected drop in demand."
