Trade Analytics
Steel
India is expected to become the second-largest steel producer in the world by 2016.

Indian Metals and Mining Industry Analysis

Latest update: September, 2016

Steel demand has outpaced supply over the last five years

  • In FY15, the consumption of finished steel grew to 76.99 MT while the CAGR increased to 5.74 per cent during FY08-15
  • Driven by rising infrastructure development and growing demand for automotives, steel consumption is expected to reach 104 MT by 2017
  • It is expected that consumption per capita would increase supported by rapid growth in the industrial sector, and rising infra expenditure projects in railways, roads & highways, etc.
  • For FY15, per capita consumption of steel in India was 60 kg against the world average of 222 kg
Growth

Demand supply gap resulting in increased imports

  • With growth in demand for steel outpacing growth in domestic production over the last few years, imports have increased
  • India was a net importer of steel till FY13, but turned a net exporter of the same in FY14. In 2015, India imported 9.32 MT of steel while exports declined to 5.59 MT in FY15 from 5.98 MT during 2013-14
  • During FY11-15, import of steel grew at a compounded annual rate of 9.01 per cent, whereas, exports increased at a CAGR of 11.32 percent
  • Total domestic demand for steel is estimated at 113.3 MTPA by 2016-17
Growth

 

Last Updated: August, 2015

India is third-largest producer of coal with a production of 565.6 million tonnes (MT) in FY14. It has the fifth-largest coal reserves in the world at 301.6 billion tonnes (BT). The country is expected to become the second-largest steel producer by 2015.

The metal and mining industry of India has recorded a strong 19.8 per cent expansion in 2011 to touch US$ 141.9 billion and is expected to reach 305.5 billion by 2015. Production volumes have also been growing steadily over the years - during the period 2007-2011, it registered a CAGR of 5.2 per cent.

India’s iron and steel exports increased at a CAGR of 4.2 per cent to US$ 8.1 billion over FY2008-13. It’s strategic location enables convenient exports to developed as well as the fast-developing Asian markets.

The Government of India has allowed 100 per cent foreign direct investment (FDI) in the mining sector under the automatic route. Mining lease has been granted for a long duration of minimum 20 years and up to 30 years. It has also approved MMDR Bill (2011) to provide better legislative environment for investment and technology.

There is significant scope for new mining capacities in iron ore, bauxite, and coal. Untapped metal reserves in India are to the tune of 82 BT. Strong long-term demand from the steel industry is expected to further boost the iron ore industry.

Sectoral Presentation (August, 2015)

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