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Indian steel demand likely to grow at 3.4% in 2014: WSA

07 Oct 2014 Evaluate

The World Steel Association (WSA) has projected India’s steel demand growth at 3.4% to 76.2 million tonnes in 2014. In its short-range demand outlook, the WSA has stated that India’s outlook is improving, following the election of a new government which is promising pro-business reforms.

The association further noted that structural reforms and improving confidence will push steel demand growth for the next year even higher at 6%, a significant rise as compared to 1.8% during 2013. However, elevated inflation and fiscal consolidation remain key downside risks to the outlook, it added.

Over the past couple of years, Indian steel industry is struggling with slowdown due to the weak steel demand. India’s finished steel consumption grew at a four-year low rate of 0.6% to 73.93 million tonnes in FY14 mainly impacted by a prevailing economic slowdown and high interest rates. During the April-August period of 2014-15, India's steel consumption grew by just 0.3% to 31.17 million tonnes (MT).  Construction sector accounts for around 60% of the country's total steel consumption, while automobile sector consumes 15%. Both sectors have been plagued by a slowdown in the economy. Along with weak demand, high input cost due to increased prices of raw material, such as iron ore has also become a main concern for domestic steel players, impacting their margins.

On global front, the WSA forecasted that global apparent steel demand growth will decline to 2% in the current year from 3.8% growth recorded last year mainly due to slowdown in Chinese demand. The growth rate for next year would remain static at 2% in 2015 to reach at 1,594 MT.

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