According to a research report on steel industry by CARE Research, domestic steel capacity increased at a
compounded annual growth rate (CAGR) of 8 per cent in 2004-05 to 2011-12.
During the same period, steel production in the domestic market also recorded a similar increase on line with the domestic steel capacity, the report shows.
The report expects domestic steel demand to grow 6.7 per cent annually till 2016-17, faster than the expected growth in Chinese demand during the same period.
While the demand for flat products in the domestic market may be supported by the automobiles and the pipe manufacturing sector, although at a timid pace, demand for long products will continue to increase on the back of modest growth in demand from the construction sector, it said.
The report expects the global supply of steel to continue to adjust itself with the change in demand. It further pointed out that the global steel industry witnessed a rather structural shift in its consumption pattern as the demand for steel in the European Union and the US failed to reach the consumption levels it achieved in calender year (CY) 2001.
However, steel appetite from the emerging economies like China and India increased significantly, it added. Globally, steel production may increase at a CAGR of around 2 per cent during CY11 to CY14, it said.
Despite declining margins and slowdown in demand, global steel industry continues to add capacity.
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