India’s steel demand to grow at 7.5% in FY24: Indian Steel Association

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Domestic steel demand in the current financial year is expected to grow at 7.5 percent to reach 128.85 million tonnes (MT), according to the Indian Steel Association (ISA).

India’s total steel demand was at 119.86 (MT) in FY23, ISA notified.

“Driven by a strong momentum in Infrastructure spending and sustained growth in urban consumption, steel demand in India will continue to expand by 8-9 million tons each year in the next two financial years, resulting in an expected growth of 7.5 percent in 2023-24 and 6.3 percent in 2024-25,” ISA said in a statement on May 26.

For FY25, India’s steel demand is expected to reach 136.97 MT, growing at 6.3 percent.

“In an otherwise gloomy global economic environment, India has been a bright spot, defying global trends. India has also successfully reigned in inflation that is still plaguing major advanced economies,” ISA said in its statement, adding, “The steel sector has benefited from strong economic growth as the correlation between growth in steel demand and GDP growth is quite strong, especially if the economy grows by around 6% or more with the multiplier being more than one in such scenarios.”

ISA's forecast is made from the demand side, in consideration of the steel using sub-sectors.  All the steel-using sub-sectors are expected to grow at 6 percent or above in both FY24 and FY25, ISA said.

The association expects the rising share of investment in GDP, backed by strong capital expenditure outlay by the government and improving private investments will drive the construction, railways, and capital goods sector.

The consumption-driven steel-using sectors – automotive and consumer durables – are expected to maintain healthy growth. Private consumption will largely be sustained by urban consumption while rural consumption is expected to witness a steady recovery, it noted.

The intermediate goods sector is more of a mixed bag, ISA said, as the sluggish global demand will limit the potential of the export sector in general. Nevertheless, growth will remain healthy in this sub-sector mainly due to the related growth in the automobile and capital goods sector, ISA said.