India's steel demand this fiscal year is unlikely to meet
the government's growth forecast of 8%, as a slowing economy reduces
consumption in key sectors such as construction and automobile.
Steel consumption between April and December 2011 rose 4.4%
from a year earlier to 50.86 million tons, showed provisional data issued by
the steel ministry Monday, far lower than the 9.9% growth logged in the fiscal
year ended March 31, 2011.
Output of finished steel in the first nine months of the
current financial year increased 7.5% to 52.06 million tons.
The slowdown in demand because of high inflation and lending
rates may affect plans by India to raise its annual production capacity to
around 120 million tons of crude steel over the next two years from 84 million
tons now.
Top India officials have admitted that economic growth may
slip to 7% this fiscal year from the initial projection of 9%, due mainly to a
global slowdown as well as high local borrowing rates.
“Demand for steel depends on economic growth. If the
economy is to grow by around 7%, there is little chance that steel consumption
will be more than that,” A.S. Firoz, chief economist at the steel
ministry's economic research unit, told Dow Jones.
Source: Dow Jones
Leave a Reply