Following the roller coaster ride of
the past two years which took
the global economy into tailspin, the world seems to be regaining in
economic stability albeit with some dramatic shifts in concentration of
economic strength. Developing economies have registered higher levels of
economic growth as against developed economies, thanks to their robust
domestic markets. Like any other industry, Indian steel industry has also
been impacted by these global shifts witnessing growing domestic demand
as well as surging demand from Asian economies.
The Indian steel industry has been moving from strength to strength
after it witnessed 30% decline during times of turmoil. As part of lessons
learnt from the crisis, the export dependency on the advanced world declined
substantially which was compensated by stimulated domestic demand. As
per the Annual Report 2009-10 by the Ministry of Steel, India has emerged as
the fifth largest producer of steel in the world and is likely to become the
second largest producer of crude steel by 2015-16. Led by strong demand for autos
and engineering services, the domestic steel demand in India remains robust.
Industry experts opine that the outlook for the domestic operating environment
is positive, driven by robust growth in infrastructure, autos, construction
and constrains on additional supply by 2011. In fact, India's construction
and infrastructure sector have been the key growth drivers for domestic steel
consumption, with a share of 61% during the FY2009-10. During the year,
India's per capita steel consumption was 48 kg vis-à-vis world average of 190 kg.
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