India's steel consumption is expected to increase by 7%

India's steel consumption is expected to increase by 7%

According to a report by India Investment Information and Credit Rating Co., Ltd. (hereinafter referred to as "ICRA"), the government's attention to the infrastructure sector has greatly increased, and domestic steel consumption in India is expected to increase by 7% in the current fiscal year (2018.04-2019.03), and this trend is likely to continue into the next fiscal year.

ICRA said that in the Trade Union budget for the period 2018-2019, the government increased investment in infrastructure construction, especially in affordable housing, power transmission and railway construction, in order to promote the growth of domestic steel consumption in India. The growth rate of domestic steel consumption is expected to reach 7% in fiscal year 2019 and fiscal year 2020.

Although domestic steel demand is still acceptable at present, due to the increasing threat of falling import costs and the sharp slowdown of steel exports caused by the intensification of Global trade friction, the growth rate of domestic steel production may remain at a low level of 2.5% to 3% under the current fiscal policy. In addition, the slowdown in China's steel demand and the resulting worries about oversupply remain the main challenges facing Indian steelmakers in the short term.

Jayanta Roy, Senior Vice President and Group Director of ICRA, said: "The recent sharp fall in international steel prices has led to a drop in Indian steel import prices, by which time these steels will arrive at Indian ports, which in turn will put pressure on domestic steel prices in the fourth quarter (2019.01-2019.03).

Despite the relatively stable input costs of domestic steel mills in India, domestic iron ore prices rose by 22% between April and December. With the closure of NMDC's Donimalai mine, there has been a persistent shortage of iron ore supply in Kanatakhstan, so the domestic steel price has fallen by a limited margin.