The decision of global steelmakers ArcelorMittal and Posco to scrap their India projects will not upset the demand supply equilibrium in the country in the short to medium term, according to some top domestic steelmakers.
With economic growth in India slowing, the consumption of the alloy, a key input for industries such as infrastructure, automobiles and consumer goods, is expected to slacken, at least in the short term.
India’s steel industry may not be adversely impacted by the cancellation of key projects by global giants ArcelorMittal and Posco, domestic steel firms said.
It may be recalled that Arcelor Mittal decided to abandon its plan to set up a steel plant in Odisha owing to land acquisition problems.
Also, South Korean steelmaker Posco cancelled its steel plant project in Karnataka. Demand for steel in India, Asia’s third-largest economy, was 73 million tonne per annum in 2012-13, which was mostly met through domestic production.
But given the government’s thrust on infrastructure and its policy to raise the share of manufacturing to 25 percent of GDP, steel market in India has a huge potential for growth, industry sources feel.
Based on an average GDP growth rate of 8 percent, domestic demand for steel is estimated to touch 155 million tonne per annum by 2020.
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