India’s Steel Demand to Surge by 8.6% in 2023: Worldsteel

The World Steel Association has announced a robust growth projection for steel demand in India, foreseeing an 8.6% increase in 2023. This forecast sharply contrasts with the anticipated global steel demand, which is predicted to only rise by 1.8% in the same year.

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The World Steel Association recently made an announcement predicting that the steel demand in India will experience robust growth, projected at 8.6% in 2023. This stands in sharp contrast to the overall global steel demand, which is expected to rise by just 1.8% during the same year. After a 3.3% contraction in 2022, worldsteel forecasts that the global steel demand will rebound in 2023, reaching 1,814.5 million metric tons (MT). Looking ahead to 2024, the association predicts an even higher growth rate of 1.9%, resulting in a demand of 1,849.1 million MT.

As of India, the global body predicts – “following a significant 9.3% increase in 2022, steel demand is projected to maintain its robust growth, with an expected 8.6% expansion in 2023 and a continued healthy growth rate of 7.7% in 2024.

Despite the challenging high-interest rate environment, the Indian economy remains resilient, and there are expectations that the steel demand will sustain its impressive growth trajectory. This growth in India’s construction sector is primarily attributed to government investments in infrastructure and a resurgence in private investment. Additionally, worldsteel, in its Short Range Outlook (SRO), predicts that infrastructure investment will further bolster growth in the capital goods sector.

The automotive sector is set to maintain its strong growth trend. While the consumer durables sector lags behind due to elevated inflation and interest rates limiting discretionary spending, it is expected to make a recovery in 2024. This recovery will be driven by increased spending during festive seasons and advancements in the Production Linked Investment (PLI) schemes.

According to Maximo Vedoya, Chairman of the worldsteel Economics Committee, the steel industry has been grappling with the effects of elevated inflation and a high-interest rate environment.

Starting from the latter part of 2022, various sectors and regions have witnessed a notable cooling in activities within steel-using industries. This trend has been evident as both investments and consumption weakened. The situation persisted into 2023, with a particular impact on the European Union (EU) and the United States (US).

In light of the lagging repercussions of tighter monetary policies, the organization anticipates that the recovery in steel demand in advanced economies will be sluggish in 2024. In contrast, emerging economies are expected to outpace their developed counterparts in terms of growth, Vedoya noted.