India’s crude steel output growth slows
Indian crude steel output rose by just 4.5pc to 102.34mn t in the 2017-18 financial year that ended 31 March, a sharp slowdown from a year earlier.
Crude steel output had increased by 8.5pc in 2016-17, after the imposition of higher anti-dumping duties on flat steel products curbed imports and helped mills boost domestic sales. The slower growth in 2017-18 may be largely a result of the higher base period a year earlier.
India’s crude steel output exceeded 100mn t in 2017-18 for the first time. Total production capacity increased by 5pc to 134.6mn t, with 57pc using electric arc furnaces (EAFs) while the remainder is blast furnace-based. India’s six largest integrated steel producers use the blast furnace route to make steel, while smaller steel producers mostly use EAFs.
Total finished steel output in 2017-18 was 104.98mn t, up by 3pc year on year. Bar and rod output rose by 2pc to 36mn t, while hot-rolled coil (HRC) production fell by 0.8pc to 24mn t.
India’s finished steel consumption increased by 7.9pc in 2017-18 to 90.68mn t, much faster than 3pc growth in 2016-17.
Infrastructure projects have been a major driver of steel sales, but a slowdown in real estate demand and sluggish manufacturing output growth capped demand and output.
Steel demand from infrastructure projects is expected to remain robust in 2018-19, which is the last financial year ahead of general elections scheduled for April or May 2019. This could lead to higher spending on infrastructure to woo voters.
India’s finished steel exports rose by 17pc to 9.62mn t in 2017-18. Italy was the largest buyer of Indian steel in the period, with its purchases increasing by 31pc to 1.34mn t. Sales of bar and rod increased by 224pc to 2.04mn t, while HRC sales fell by 0.2pc to 2.82mn t. India is a major supplier of HRC to Vietnam, one of the world’s largest importers, but has not been able to compete with Chinese supplies over the past few months.
Total finished steel imports to India rose by 3.5pc to 7.48mn t in 2017-18. The largest supplier was South Korea, which increased its shipments by 18pc to 2.47mn t, followed by China at 1.93mn t, down by 11pc.