India’s steel output is likely to rise by 8-9pc to reach 112mn-114mn mt in FY2022 from 111mn mt produced in FY2021, according to Care Ratings. Economic recovery, increased government spending and easy liquidity conditions are expected to support domestic steel demand this fiscal.
India’s Union Budget for 2021-2022 has increased funding for infrastructure and manufacturing to boost the economy. The budgetary allocation for capex has increased by 34.5pc from the prior year to Rs5,540bn with increased outlays for defence, railways, highways, and roads. With this, India’s steel consumption is likely to rise by 10-12pc in FY22 to cross 100mn mt for the first time, stated the report.
The uptrend in steel prices is forecast to continue in FY2022. Lower exports from China, stimulus package by various countries are likely to boost demand for steel and import of steel from China are expected to keep prices elevated. Robust steel demand in China and production cuts in 2021 to lower CO2 emission and high iron ore will also support global steel prices. The short supply of steel in the global market also provides attractive export opportunities to domestic steel producers in FY2022.
India produced 102.49mn mt crude steel and 94.66mn mt finished steel in FY2021, which is down 6.1pc and 7.8pc, respectively, from the prior year, according to official data from India’s Steel Ministry. While consumption of finished steel fell by 6.7pc to 93.43mn mt from FY2020 due to the impact of the pandemic.