Boosted by higher spends on infrastructure and gradual revival of the automotive sector, India’s steel demand growth will be the highest in 2022 at 7.5% among top consuming nations, including China and the US, the World Steel Association (WSA) said on Thursday.
Globally, however, steel demand will be slower in the current year to just 0.4% from 2.7% recorded last year. Máximo Vedoya, chairman of the Worldsteel Economics Committee, said, “For 2022 and 2023, the outlook is highly uncertain. The expectation of a continued and stable recovery from the pandemic has been shaken by the war in Ukraine and rising inflation.”
WSA, whose members produce 85% of the global steel, in its short-range outlook forecasted India’s steel demand at 114 million tonne (MT) in 2022 compared with 106 MT a year earlier.
In 2023 also, India’s steel demand growth will be the second highest at 6% after Germany which is likely to have a better 7.6% rate of growth in demand. Germany, however, consumes one-third of what India consumes annually.
“In 2022, construction and manufacturing (of India) will likely be supported by spending on infrastructure and a gradual revival in automotive production, with an expected improvement in semiconductor supply. Expected raw material supply constraints in the international market will result in higher domestic mining output and support the capital goods sector,” WSA said.
However, the war in Ukraine poses a renewed risk of supply disruption and inflation, which may impact Indian central bank’s accommodative stance and consumer sentiment, it said.
The impact of the war will also be felt globally via higher energy and commodity prices — especially raw materials for steel production — and continued supply chain disruptions.
“Furthermore, financial market volatility and heightened uncertainty will undermine investment. Such global spill-overs from the war in Ukraine, along with low growth in China, point to reduced growth expectations for global steel demand in 2022,” WSA said.