India is among one of the key producers and consumers of steel pipes and tubes in the Asia-Pacific region. India’s steel production crossed 110 million tonnes in fiscal 2020 and steel pipes contribution stood at around 8% of India’s steel consumption.
According to an estimate by rating agency CRISIL, steel pipes industry is expected to grow at a CAGR of 7-8% for the next five fiscals. It also estimated that structural pipe demand is expected to grow at 8-10% whereas SAW (Submerged Arc Welded) and Seamless pipes are likely to witness a growth of 5-6% CAGR for the next five years.
SteelMint has analyzed the sector by categorizing the steel pipe industry into two segments – first, electric resistance welded (ERW), and second, submerged arc welded (SAW) and seamless, together referred to as S&S.
Growth Drivers
In the coming five years we foresee the demand coming in from increased usage of pipes in infrastructure projects such as:
- Pradhan Mantri Awas Yojana targeting construction of 1 crore houses by 2023.
- Bharatmala Pariyojana in which the total investment for 83,677 km committed new highways is estimated at Rs 5.35 lakh crore by 2023.
- Increase in demand for better quality residential projects and warehouses.
- Expansion of City Gas Distribution (CGD) network to cover 70 per cent of India’s population which will require 10,000 – 15,000 km of gas pipeline.
- GAIL steel pipe tenders worth Rs 1,000 crore in process for around 100,000 tonne steel.
- Increase in budgetary allocation to Rs 39,029 crore for water segments during fiscal 2020-21.
A rise in the growth trajectory of infrastructure, construction and industrial production is expected to boost the market for steel pipes in the coming years.
To know more about the upcoming opportunities in the steel pipes sector join us for our webinar on Indian Steel Pipes and Tubes – A Big Growth Expected? on 25th September 2020 at 1530 hrs.
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