Demand of Steel in India - Evolving Scenario

Abstract

The present production of steel in India is about 65 million tones and the per capita consumption of finished steel is 47.8 kg which is much below the world average of 180 kg. The rural consumption is abysmally low at 2 to 3 kg However, India is now at the threshold of a significant increase in steel production and demand. India is now the happening place in the eyes of the outside world. It has huge resources of raw material for iron and steelmaking, enough skilled manpower, and labour cost is low. It has the potential of becoming the steel producer at lowest cost.

The sharp hike in demand for steel is arising from the larger disposable income of a large section of people, huge investments by the Govt, of India to improve the infrastructure and massive investments by both Indian and foreign companies to make India as the manufacturing hub for steel related items. If India can produce steel at lowest cost, there is huge scope for increasing exports.

The crude steel production target announced in 2006 by the Govt, of India was 110 Mt by 2010 and later revised it Experts predict that the production by 2012 will be around 100 to 120 Mt and by 2020, it will be 180 to 250 Mt The production of special steels like Stainless Steels, high strength steels, etc. will also increase proportionately for the automobile sector, consumer goods and construction. The demand of steel is predicted to grow at the rate of 10% each year from how onwards.

The present low per capita consumption of steel, the aspirations of people for higher standard of living, its raw material resources, export opportunities etc. will make India surely the second highest steel producer in a short time which may not be comparable to China but implies significant achievement compared to the present position.