INDIA STEEL MARKET
OVERVIEW
The Indian steel industry is considered as one of the few bright spots in the global steel industry. The steel industry in the country revived from the demonetization and the goods and services tax reform and is growing at a rapid pace. India was the world’s second largest steel producer with production standing at 111.2 million tonnes in 2019. The growth in the Indian steel sector has been driven by domestic availability of raw materials. Subsequently, the steel sector has been major contributor to India’s manufacturing growth.
India steel market expected to have high growth rate over next ten years on version of government focus on accelerating infrastructural projects coupled with easy availability of raw materials. With the development new strategies and new production values, upgradation and modernization of older plants is also positively influencing the growth of the market.
The India steel market is expected witness significant growth during the forecast period, owing to factors, such as the increasing demand from manufacturing sector, the rising preference toward pre-engineered buildings and components, and government initiatives for infrastructure development activities.
India Steel market can be segmented based on the type, production method and region. Based on production method, the market can be segmented into electric arc furnace, blast furnace-basic oxygen furnace, among others. Electric arc is the preferred method for the production of steel as it uses electric arc to melt scrap and convert it into liquid steel. Also, use of electric arc helps to bring down the use of cooking coal in blast furnace, thereby driving growth of this segment.
Construction is a sector which observes huge adoption of steel as structures are made with the use of steel due to its high durability and strength. Also, structures made with steel can withstand natural calamities and can be designed to meet the requirements of unique projects.
Additionally, social sector schemes by the government such as Pradhan Mantri Awas Yojana which is about housing for all, Sardar Patel Urban Housing Mission, 100 smart cities mission and infrastructural development of medium and small towns are further driving growth in India steel market.
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INDIA STEEL MARKET DURING PANDEMIC
During the pandemic, India’s demand for steel contracted in April 2020 with end-user industries like automotive, real estate, and infrastructure that constitute 80% of demand, coming to a virtual standstill.
According to a world steel report, India estimates 8.7 million tonnes of crude steel production in March 2020, down 13.9% compared to March 2019, primarily due to the ongoing difficulties presented by the pandemic globally. Domestic steel production fell by a record 69.5% year-on-year in April 2020.
JSW steel has planned a USD 4.14 billion capital expenditure programme to increase its overall steel output capacity from 18 million tonnes to 23 million tonnes by 2020, Tata Steel has decided to increase the capacity of its Kalinga nagar integrated steel plant from 3 million tonnes to 8 million tonnes at an investment of USD 3.64 billion. The investments and acquisitions are made to meet the growing demand for infrastructural projects in the coming days.
INDIA STEEL MARKET SEGMENTATION
India Steel Market By Type
- Carbon steel
- Stainless steel
- Alloy Steel
- Tool Steel
- Mild Steel
- Structural Steel
- Others
India Steel Market By Production Method
- Blast Furnace-Basic Oxygen Furnace (BF-BOF)
- Electric Arc Furnace
- Others
India Steel Market By End Application
- Construction
- Automotive Manufacturing
- Other Manufacturing
- Power and Utilities
- Oil and Gas industry
- Domestic Appliances
INDIA STEEL MARKET DYNAMICS
A study conducted by World steel in collaboration with the Indian Steel Association notes that the construction sector is going to be a pan-India driver of steel demand in the country. This would be driven by strong government thrust for infrastructure development and housing for all.
Government initiatives such as ‘Smart Cities’ and ‘Affordable Housing’ as well as building of industrial corridors will boost India’s steel demand definitively. For the country, it means enhanced connectivity, reduced logistical costs and well-distributed development spanning all Indian states.
Other than construction sector, to develop the steel industry is expected to come through the ‘Make in India’ initiative, which aims to transform India into a global design and manufacturing hub, with sectors along the industrial and freight corridors. To that end, a number of Indian states are expected to set up automotive and ancillary industries to become global hubs for manufacturing export-oriented small cars.
Structural steel is one of the major raw materials used in construction of pre-engineered buildings. The government is pushing through extensive reforms to strengthen infrastructure and enhance productivity. It will be interesting to see how effectively India implements its reforms agenda and infrastructure plans to pave the way for optimal growth and expansion of the steel industry.
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INDIA STEEL MARKET RECENT PARTNERSHIP
Tata Steel and Thiess have agreed to work together to provide mining technical services such as exploration, resource evaluation, and mine planning. Thiess will also work with Tata Steel to provide global mining companies with cost-effective integrated business solutions. Thiess is established in Australia and is one of the leading mining service suppliers in the country.
Tata Steel will collaborate closely with Thiess India Engineering Hub, which delivers geotechnical and mine engineering, technology service delivery, business process automation, and learning and development services to Thiess’ global operations.
This partnership would supplement Tata Steel’s strengths and capacity in raising the standards of such services in India, as well as globally, for more scientific and sustainable mining development.
The Adani Group has entered into an agreement with POSCO of South Korea to explore business potential in sectors such as steel and renewable energy, among others. Both parties have agreed to this in a memorandum of understanding (MoU). The Adani Group has agreed to investigate commercial opportunities with other companies, including the creation of a green, environmentally friendly integrated steel factory in Mundra, Gujarat.
INDIA STEEL MARKET COMPETITIVE LANDSCAPE
The rising demand in India, combined with the fact that global manufacturing companies’ focus to diversify their production by setting-up low-cost plants in countries other than China, is expected to drive the India’s manufacturing sector to grow more than six times by 2025, to USD 1 trillion. This increase in the Indian manufacturing sector had increased the number of manufacturing. Thus, this is driving the demand in the structural steel fabrication market in the country.
For instance, the number of mobile manufacturing plants that were setup in India had increased more than 60 times since 2014. This shows the increasing demand for structural steel fabrication, which is due to the increasing number of manufacturing units in the country.
Government initiatives, such as the construction of metro stations, new no frill airports, international terminals, industry corridors, power plants, and ports, require heavy steel structures. Thus, these factors are expected to drive the growth of the structural steel fabrication market in India.
MAJOR CONTRIBUTING INDIA STEEL MARKET COMPANIES
The top steel companies in India constitute one of the largest industrial revenue earnings in country, as the steel industry in India is undergoing new stages of development, aided by economic resurgence and growing demand in the downstream sector in India.
- Tata Steel
- Jindal Steel Works Steel (JSW)
- Steel Authority of India Limited (SAIL)
- Rastriya Ispat Nigam Limited (RINL) (which is going to be captured by POSCO)
- Essar Steel
- MESCO Steel
THIS INDIA STEEL MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS
- India Steel Market size and Forecast, by region, by application
- Average B-2-B price for India Steel Market, by region, per user
- Technology trends and related opportunity for new India Steel Market tech suppliers
- India Steel Market share of leading vendors, by region,
- Coronavirus impact on India Steel Market earnings
