India sees strong steel demand
Global demand for steel is rising, prompting mills to expand production capacity. In response to this trend, JSW Steel and POSCO have joined forces.
India’s largest steelmaker, JSW Steel, and Korean giant POSCO have committed more than US$7.7 billion to build a new plant in India. The project is an integrated steel venture. It is expected to have an annual production capacity of 5 million tonnes of steel. The plant will be in the Indian state of Odisha, known for its rich iron ore deposits.
According to preliminary information, the agreement will be implemented as follows:
– initially, the companies plan to invest 200 billion rupees;
– the plant will have started operating until 2025;
– within three years, the investment in the plant will reach US$7.7 billion;
– the plant’s production capacity will increase to 18 million tonnes per annum.
The companies believe that the new plant will help meet the growing demand for steel. In addition, the project will bring economic benefits and new jobs to the state.
Steel industry overview
India has seen a steady increase in steel demand in recent years, in contrast to the declining trend in metal demand in the European and US markets. The reason for the increased interest in metal in the country is the high growth momentum of the local economy, which, in turn, is driving infrastructure development.
From April to August 2024, demand for steel in India exceeded the highest level seen in the last seven years. One factor behind this excitement is the interest shown in the country by global companies. They see India as an excellent option for diversifying their supply chains, which has boosted the local manufacturing and construction sectors.
According to Deloitte forecasts, demand for steel in India will be between 221 and 275 million tonnes by 2033. At the same time, the growth rate will be around 7% over the next 10 years. Analysts see infrastructure projects as the main driver of the sector’s development. These include the construction of industrial corridors as part of the National Master Plan presented by the Prime Minister.
Steel consumption in India has increased by more than 14% year-on-year to 136 million tonnes. The government is expanding spending on infrastructure projects, providing an incentive for steel producers. Five Indian states, including Maharashtra and Uttar Pradesh, have become major raw material consumers. They account for 41% of the total metal consumed.
