CRU: India - A Steel Giant in the Making

CRU: India - A Steel Giant in the Making

PR Newswire

LONDON, January 11, 2018

LONDON, January 11, 2018 /PRNewswire/ --

India has all the makings of becoming the driving force of the global steel industry. As China cuts steel capacity, India could be stirring for rapid acceleration in growth, but obstacles remain.

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China's consolidation of its steel sector through planned capacity cuts, as well as stricter environment norms and mining safety inspections, has had a massive impact on the global steel industry. But, while China grapples with overcapacity issues, it is time to turn the spotlight on India, which is projected to be the single largest driver of steel demand in the next 20 years, with capacity estimated to rise over 50%. Indeed, with similar population numbers, India's steel intensity of 61 kg per capita against China's 647 kg per capita calls for attention to the massive expansion potential that the country holds.

Although there is a rationale for India to scale-up its steel making capacity, we discuss the impediments faced by the country that will make this journey challenging. Bureaucratic roadblocks to project implementation, credibility of government mandates and incentives and supply chain management of key raw materials are some of the major challenges discussed. Alongside this, we also look at the signs of progress observed in recent times.

The elephant in the room
India's steel growth targets are often criticised for being overambitious and that is the very reason that the initial buzz created by any new scheme or expansion plan quickly fizzles out. On top of this, the opaque and complex nature of the steel sector's workings across different states, as well as political influence, especially in the mining industry, makes it harder to digest the optimism around growth plans. However, it is noteworthy that, despite the hurdles India faces, it has managed an average steel production growth of 5.6% in the last five years and now has the third largest steel industry after China and Japan, having displaced the USA in 2015. This growth is underpinned by the leading economic growth of 7.9% witnessed in 2016 against global growth of 2.4%. India may not be ready to soar, but it can surely run.

Read the full story: http://bit.ly/India-steel-giant  

Read more about CRU: http://bit.ly/About_CRU

About CRU  

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia - our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU - big enough to deliver a high quality service, small enough to care about all of our customers.

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