JSW Steel expects domestic steel demand to grow by about 6 per cent in 2016
17, adding that the longterm outlook for the sector continues to be bright.
"Despite temporary challenges, country's longterm outlook for steel sector continues to be
bright. India's steel sector has now risen to be the thirdlargest producer of crude steel in the
world and we expect the domestic steel demand to grow by about six per cent in FY17," JSW
Steel Chairman and Managing Director Sajjan Jindal said in the company's annual report.
He also said that the government is aiming to scale up the country's steel production to 300 million tonnes by 2025.
Despite multiple headwinds, the country produced 89. 8 million tonnes (MT) crude steel in 201516, an increase of 0.9 per cent. In FY16,
the country consumed 80.5 MT of finished steel, registering a growth of 4. 5 per cent.
Jindal pointed out that recent government measures are expected to boost the steel industry's growth.
The Ministry of Steel is facilitating setting up of an industrydriven Steel Research and Technology Mission of India (SRTMI) in association
with public and private sector steel companies to spearhead R&D activities in the iron and steel industry with an initial corpus of Rs 200
crore.
Government also plans to auction eight coal blocks with reserves of 1,143 MT to steel and cement firms.
It has planned special purpose vehicles (SPV) with four iron ore rich states of Karnataka, Jharkhand, Odisha and Chhattisgarh to set up
plants having capacity between 3 and 6 MTPA.
In the Union Budget 201617, the government has also proposed to spend Rs 2,18,000 crore on roads and railways.
The country's automobile industry witnessed a rebound in demand among emerging economies. Such a scenario augurs well for the
domestic steel sector, he said.
Other government initiatives, such as housing for all by 2022, power for all by 2019, 100 smart cities by 2022 and Atal Mission for
Rejuvenation and Urban Transformation (AMRUT) are likely to drive steel demand significantly, Jindal said.
During 201516, India was the only major steel consuming market globally which saw a demand escalation. However, the country suffered
from an unprecedented and unfair inflow of steel imports from China, Japan, South Korea and Russia.
These countries continued to sell their surplus steel production at predatory prices, he added.
South Korea and Japan benefited due to the free trade agreement with India.
As a result, the domestic industry was forced to take a series of price cuts, leading to a severe margin squeeze for domestic steel
companies, Jindal said.
Source: ET