Steel consumption predicted to increase by 5-6%

India’s steel consumption is expected to increase by 5-6% in 2019, according to CARE Ratings. This growth will be driven by the government’s resolve to spend on infrastructure and construction. However, the agency lowered its forecast of steel production from 6-8% in February’19 to 5.9% in 2019 and 3-4% in 2020, signaling the possibility of more imports to meet the domestic demand. Low production of steel is attributed to the fact that no major capacity is expected to come up from large players, and small players are slated to sustain output growth rate at last year’s levels.

While global steel prices have softened (dropping from US$ 600 per ton in June’18 to US$ 520 per ton in May’19), demand in the domestic market continues to be strong.