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 10 % of India’s steel consumption. The INR 50,000 crore steel pipes industry is split equally between the structural and S&S segments and the domestic market is split 70:30 respectively between the two segments.
As per SteelMint’s analysis the structural pipes and tubes consumption stands at around 5.5 million tonnes which is expected to grow at a CAGR of 8-10% and reach around 10 million tonnes by 2024. Some of the key drivers of the growth are as follows:
- The Pradhan Mantri Awas Yojana (PMAY) scheme was launched by the Government of India to boost the affordability of houses against an inflated real estate sector. The scheme aims to achieve its objective of “Housing for All” by 31 March 2022, the 150th birth anniversary year of Mahatma Gandhi, by constructing 1 crore houses across the nation.
- The government of India is planning to construct 100 additional airports by 2024 in order to boost the air connectivity. An investment of INR 19,000 crore is committed to upgrade the airport infrastructure, especially in smaller cities over next three years.
- New metro rail (subway) systems are under construction and bringing about vast changes in 15+ Indian cities at a breath-taking pace. Currently 457.56 km approved routes under construction is driving the demand for structural pipes and tubes.
- Bharatmala Pariyojana is a centrally-sponsored and funded Road and Highways project of the Government of India. The total investment for 83,677 km committed new highways is estimated at INR 5.35 lakh crore, making it the single largest outlay for a government road construction scheme.
- Modern methodology for construction of residential projects, commercial projects and warehouses involves usage of structural steel as it takes less time to setup the structure and it also has resale value, which is driving the demand for structural pipes and tubes.
- The government is extremely driven and focused to construct new highways, bridges, flyover and several other public utilities will thrive the demand.
In a recent webinar by SteelMint on pipes and tubes, Mr. Abhinav Gupta (Chief Strategy Officer) of APL Apollo Tubes Ltd. stated that there is significant demand coming in from government projects and consumer’s expectation of quality residential projects. He categorically pointed out that the consumption of structural steel pipes and tubes as a percentage of overall steel consumption at a global level stood at around 9%, whereas, in India it is at around 4% – which is likely to increase in the next 5 years and be at par with the global level.
APL Apollo Tubes Ltd has the highest structural pipes and tubes production capacity in India of around 2.5 million tonnes and captures around 40% market share. It has recently announced its FY21 Q2 results indicating a growth of 32% Y-o-Y which gives a very positive outlook for structural segment in the coming years.
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