Indian Economy News

Steel demand in India to grow around 10% in 2022: Moody's

According to Moody's Investors Service, steel demand would expand by roughly 10% through 2022 as the Government of India continues to focus on the construction of roads, trains, ports, and airports.

In terms of commerce, the report predicts that India's steel exports would stay robust in the coming months, as increased pricing and regional demand encourage steelmakers to transfer a portion of their production to exports.

Due to the Russia-Ukraine conflict, input costs have risen, and businesses have been apprehensive of increasing raw material costs eating into their profit margins. Prices of iron ore and coking coal, two crucial components in the commonly used basic oxygen furnace (BOF) process of creating steel, have lately risen and are projected to remain high as the conflict tightens supply.

Steel producers with greater raw material self-sufficiency, according to Moody's, are currently better positioned. Tata Steel and JSW Steel, for example, have total or near-perfect iron ore self-sufficiency for their Indian operations. As a result of their backward integration into the manufacturing of critical steelmaking inputs, these two enterprises are more protected from these risks.

According to Moody's, India would have the highest demand for steel in the APAC area, followed by Korea, Japan, and China.

While China was the leading steel exporting country in 2020, India was ranked eighth, with its exports accounting for 4% of total global exports.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.