Steel consumption in India surges as the economy revives

India’s steel consumption is set to break records this year, reversing the performance in 2020 when demand crashed due to the COVID-19 pandemic hit on the economic activity.

The International Monetary Fund (IMF) forecasts India to grow 9.5% this year as the economic activity in the country has revived as a deadly second wave of COVID-19. This expected growth contrasted last year’s growth when the economy tipped into an unprecedented 7.3% contraction. The contraction is due to nationwide lockdown, which kept the country to a standstill.

The industry experts say steel demand is expected to surge 17% to 110 million tons in 2021-22. Whereas the consumption of steel in 2020 fell year-on-year for the first time in 15 years. Also, rising power consumption and mining activity, along with higher passenger vehicles and tractor sales, pushes up demand for the metal.

The steel industry has seen a good revival in June 2021 and July 2021. The industry is expecting an increase in construction demand after the festive season. However, the steel exports are expected to be reduced this year as steelmakers divert more supply to meet the local market, which jumped to 17 million tons last year.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

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