With China’s massive construction sector still in a slump and the United States and Europe on the verge of recessions, India has emerged as a saviour for dwindling global steel demand.
India is in the midst of a construction boom as it prepares to overtake China as the world’s most populous country next year. In order to compete with China as a manufacturing hub, Prime Minister Narendra Modi is seeking to modernise roads, rail networks, and ports.
According to the World Steel Association, this will result in a 6.7% increase in steel demand to around 120 million tonnes in 2023, the highest growth rate among major economies. India, which also saw a similar expansion this year, overtook the US to become the world’s No. 2 steel consumer after China a couple of years ago.
“The nation-building phase of any economy requires a lot of steel and commodities,” said Jayant Acharya, deputy managing director at JSW Steel Ltd., the nation’s biggest producer. India is going through that phase in this decade, and it could boost the country’s steel consumption to over 200 million tons by 2030, he said.
ArcelorMittal Nippon Steel India Ltd., a joint venture between the Mittal family of India and the Japanese producer, intends to more than triple capacity to 30 million tonnes over the next decade. South Korean steelmaker Posco Holdings Inc. and India’s richest man, Gautam Adani, are also interested in establishing mills in the country.
India produces the vast majority of the steel it consumes, but it is also forced to import more to keep up with rising demand. According to government figures, Inward shipments rose 15% in April through October from a year earlier to 3.1 million tons.
