Demand for long steel likely to grow at 7.6%, hit 63 mt by 2020-21: Study

Written by R Ravichandran | Chennai | Updated: Dec 19 2013, 09:44am hrs
The demand for long steel in India is expected to grow at a compounded annual growth rate (CAGR) of 7.6% to reach 63 million tonne in 2020-21, driven by the requirements of the construction and infrastructure sectors, according to a report by Frost & Sullivan on the


The total demand for long steel (non-alloy) products in India was around 34 million metric tonne in the 2012-13 fiscal, growing at a CAGR of around 6.3%. The bars and rods segment is forecast to reach 54.7 million tonne in 2020-21 at a CAGR of 8.3%. The demand for steel rebars in India is projected to reach around 42 million tonne by 2020-21, at a CAGR of 8.28%, the report said.

The steel rebars market in India is maturing as there is a significant shift towards value-added products, such as the corrosion-resistant rebars used in many upcoming projects.

This would lead to better price margins and realisation for industry participants, the report said.

In a market like India, the consumption of long products is usually more than that of flat products due to high demand from infrastructure development projects. The construction sector accounts for 50% of India's total steel consumption.

The Planning Commission has proposed an investment of $1 trillion for the infrastructure development of the country during the 12th Five-Year Plan. This will definitely create massive demand for long products in the next five years. Government projects, such as the expansion of highway network through various schemes like North-South-East-West corridor and Golden Quadrilateral involving interconnection of the four metro cities (Delhi, Mumbai, Chennai and Kolkata), have also created demand for long products, especially rebars.

Total long steel product imports by India were around 2.8 million tonne in 2012-13, with bars and rods contributing around 80%. Total exports of long steel products were 1.4 million tonne in 2012-13, with bars and rods contributing around 78%. The export of bars and rods has increased around 20% over 2011-12.

secondary producers (smaller capacity units producing steel using induction or electric arc furnaces) account for around 71% of the domestic production of bars and rods. The other key players are integrated steel

producers , such as SAIL, RINL, TSL and JSWL.