India’s primary steel producers Tata Steel, JSW Steel and Jindal Steel Power (JSPL) are looking forward to an year of robust domestic demand on the back of higher government spends on public infrastructure, pick-up in the construction industry and rise in consumption. Export markets could be lucrative too, given elevated prices of the alloy in key markets.
“The world market is going through a phase of change owing to the pandemic and Russia-Ukraine conflict. This is going to have a deep impact on the global supply chains and jack up commodity prices. Indian economy is expected to be stable with very significant spending allocation by the government on public infrastructure,” said Koushik Chatterjee, executive director and chief financial officer, Tata Steel.
Chatterjee said globally there will be a short supply of steel as the entire Russian and Ukrainian supplies have vanished from the seaborne trade. There could be significant supply disruptions globally, especially in Europe, he added.
JSPL MD V R Sharma said, “The domestic steel industry will have a very good run in 2022-23. There will be healthy demand and surge in exports. Profitability will be good. Whether the price can be maintained at the current level will be decided by how the input costs will behave. But there may not be a margin erosion in 2022-23,” he said.
India’s crude steel production stood at 118 million tonne (MT) in 2021-22, up from 104 MT in 2020-21. This is likely to go up to 130 MT in 2022-23. While domestic consumption is likely to go up by 7-8%, export volume will go up to around 20% of the production in FY23 from around 12% in FY22. During April-February, India exported around 13 MT steel while its imports were 4.3 MT.
JSW Steel director (commercial and marketing) Jayant Acharya said the steel demand will be good in 2022-23 both globally and in India. Overall economic activity and increase in steel consumption will be buoyed by efforts to build /rebuild infrastructure, focus on self-reliance in manufacturing and energy. “India will be a growth story not just for the current fiscal, but for this decade as well, thanks to government’s thrust on building infrastructure and its efforts to scale up manufacturing and generating more power through renewable sources,” he added.
“As the per capita income in India grows, we will see an increase in demand for steel from hinterlands — be it for housing, appliances, scooters, cycles, bikes or cars. The future looks very bright for India with improving economic activity for this decade. This will push demand for various types of materials, including steel,” Acharya said.