Public sector steel giant Steel Authority of India or Sail has said steel consumption in India may grow more than 10% in the current financial year 2011-12, ahead of the 8.5% growth in the country?s gross domestic product (GDP). This would also justify the huge expansion plans lined up by the state-owned steel maker, as well as many other private players like Tata Steel, JSW Steel and Essar Steel as the country readies for an estimated steel production of close to 200 million tonnes per annum (mtpa) by 2020 from the current 70 mtpa. Sail chairman CS Verma told FE, ?As per our steel policy and steel ministry estimates, by the year 2011-12, steel production in India will be around 110 mtpa, which by the year 2020, will get scaled up to 180-210 mtpa. By 2050, we are expecting the steel production to be 500 mtpa.?
Sail, which is planning to expand its capacity to 23.46 mtpa by FY13 and then to 60 mtpa by 2020 said, steel will be in demand as huge investments are made in power, road and infrastructure sectors. SAIL has lined up expansion at all its plants in Bhilai, Rourkela, Bokaro and Durgapur among others.
Meanwhile, Tata Steel, JSW Steel and Essar Steel have also announced huge capacity expansion to meet the rising demand in the country. Tata Steel?s domestic manufacturing capacity will jump three fold to 21 mtpa following the expansion of its Jamshedpur project and Orissa and Chattisgarh’s greenfield units becoming operational. Similarly, JSW Steel also targets to expand capacity to 32 mtpa by 2020. Moreover, Essar Steel’s capacity addition at its plant in Hazira (Gujarat) will be completed by December 2011. Following the expansion programme, the steel plant?s capacity will go up from the current level of 4.6 mtpa to 10 mtpa. According to experts, India is one of the fastest growing economies in the world and steel demand in India is growing much faster than global peers. Steel majors are all set to cash in on the growing demand coming from the automotive and infrastructure sectors.
Verma said, ?The infrastructure spend in the 11th Five-Year Plan is to the tune of $500 billion, which is 9% of the GDP. If you see the infrastructure spend in the 10th Five-Year Plan, it was only 5% of the GDP. Whereas, in the 12th Five-Year Plan, as per the preliminary estimates of the planning commission, $ 1 trillion is expected to be spent, which will be roughly about 10% of the GDP,? he added.
A report by Anand Rathi Research said, ?Within a year of the recession, Indian steel consumption revisited 9-10% growth; given strong demand drivers, it is expected to sustain these levels for the next couple of years.?