Promote steel consumption while building infrastructure

By: |
Published: October 20, 2015 12:10:38 AM

The average share of the construction sector in global steel consumption at around 50-55% implies that irrespective of the stage of growth of the economy, revival of steel demand critically...

The average share of the construction sector in global steel consumption at around 50-55% implies that irrespective of the stage of growth of the economy, revival of steel demand critically hinges on development and expansion of this  sector. World Steel Dynamics, an information service provider, estimates put the steel intensity of investment in construction nearly 7 times higher than that in other important sectors like machinery and equipment, automobile, household appliances and packaging.

Last year the construction sector grew at a negative growth of 2.5 % in China which drove down steel consumption -3.3 %. In India, the sector rose by only 4.1% in 2014, impacting a slow growth of 2.2% in total steel consumption. To push up the economic growth, all the advanced steel-producing countries have called for a big boost in investment in infrastructure building and up gradation of existing facilities in urban infrastructure, rail and road network and also constructing a few residential complexes. This would not only enhance steel consumption but also contribute to higher utilisation in indigenous capacity.

It is also well known that steel intensity in project and non-residential construction is significantly higher than that in real estates. Steel-cement ratio in project construction exceeds the same in individual houses particularly in mass housing projects up to 3 to 4 floors. For higher floors, of course, more use of steel adds to a number of advantages like faster construction, availability of extra floor space by replacing concrete slabs with light gauge high-performance steel, castellated beams etc. For high-rise buildings, the requirement of steel is more to construct additional roofing space in each floor, the basement, the covered parking and multi-level parking and other subsidiary constructions in the additional spaces. In advanced countries the paucity of space requires houses and compendiums in the cities to be multi storied and more steel-intensive. In India, the mass housing projects and affordable housing projects funded primarily from the government sources may not provide much space for higher steel application except for reinforcement steel used for concrete. In the smart city concept, the emphasis is more on digital advancement, improvement in public services, eco friendly environment, safety and security for the citizens, good roads, adequate electricity and water supply.

Each smart city can be planned with an elegant looking entry gate made out of high grade pre-painted steel or stainless steel to project a shining image. At busy road connections the small span steel-concrete composite Road over Bridges (ROB) may be planned for safe movement of the senior citizens, women and children. A good number of kiosks (for multiple uses), dustbin, public conveniences, meeting places and community halls in the locality made with innovative steel design would provide elegant and environment-friendly construction. As steel structures are of permanent nature and require little maintenance and there is an inherent tendency to use locally available cheap materials and then indulge in annual maintenance activities at the cost of the exchequer, the consideration of Life Cycle Cost advantages of steel-based construction must be inculcated at the planning stage itself for the smart cities. This aspect should be addressed on priority if steel is to play a stellar role in the housing and city planning activities of the Government.

It is, therefore, necessary to distinguish between investment earmarked for residential construction and investment made in infrastructure building and make suitable changes in the methodology of demand estimation while correlating construction sector growth with growth in steel demand. It is reiterated that steel use for construction sector as a whole in the country has gone up appreciably in the past one-and-half decade thanks to wider awareness about steel, acceptability and spread of steel- based designs, new user-friendly Codes and Standards (IS 1786, IS 15962, IS 11384), development of light-weight, high-performance steel. Despite all these developments, a good deal of challenges needs to be addressed for higher use of steel in construction sector in India.

The author is DG, Institute of Steel Growth and Development. The views expressed are personal

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.