India has emerged as a saviour for the flagging global steel demand with China’s enormous construction sector still in a slowdown and the US and Europe probably heading into recessions.

India is experiencing a building boom and is on track to surpass China as the world’s most populated nation by the end of the year. In an effort to compete with China as a manufacturing hub, Prime Minister Narendra Modi is attempting to modernise the roadways, rail networks, and ports.

India, which is poised to overtake China as the world’s most populous country by next year, is in the middle of a massive infrastructure-building boom. The Modi government’s plan to increase CAPEX is turning out to be a masterstroke for India as well as for India as the entire world economy is in the doldrums.

India had already overtaken the US to become the world’s second-largest steel consumer this year after China a couple of years ago. According to the world steel association. India’s growing demand for steel will translate into a 6.7% jump in steel demand to around 120 million tons in 2023.

Jayant Acharya, deputy managing director of JSW STEEL Ltd says “The nation-building phase of any economy requires a lot of steel and commodities and India is going through that phase in this decade and it could boost the country’s steel consumption to over 200 million tons by 2030. 

In the ensuing decades, the capacity of ArcelorMittal Nippon Steel India, a joint venture between the Mittal family of India and the Japanese manufacturer, will more than triple to 30 million tonnes. The richest man in Asia, Indian tycoon Gautam Adani, and the South Korean steelmaker Posco Holdings are also exploring into building mills there.

India produces the vast majority of the steel it uses, however, due to the increased infra boom it’s also being forced to import more to meet the surge in demand. According to government statistics, inbound shipments increased by 15% to 3.1 million tonnes from April through October of last year.

Image source: AP