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India: Port-building and shipping can catalyse steel demand

Monday, 28 January 2019 | 00:00

The Indian steel industry has a remarkable potential for growth. As the country moves towards becoming a developed economy, the steel industry will play a significant part in this transformation. The projected demand for steel in India is going to increase from 80 million tonnes in 2015 to 110-120 million tonnes by 2020. Construction and infrastructure are likely to be the dominant consuming segments. These two segments, combined with manufacturing, are expected to result in robust demand for steel in coming years.

With the government’s focus on ‘Make in India’, there has been significant investments in the infrastructure, automobile, shipbuilding, and power sectors, which have galvanised the demand for steel. The Sagarmala programme, for instance, has helped in driving the demand for steel in the shipping and port-building sectors. The programme was conceived with the intent of unlocking the potential of India’s waterways and coastline. Sagarmala envisions rapid port-led development that will make the coastlines a more integral part of India’s growth story. The construction and upgradation of ports and maritime floating infrastructure for maritime transport will require large quantities of high-grade steel. This presents a unique opportunity for the major domestic players.

Consequently, there have been numerous technological innovations in the industry, as steel manufacturers are offering higher grades of steel. The government is also investing in indigenous development of technology for innovative products, such as cold rolled grain oriented (CRGO) steel sheets among others. There have also been rapid strides in the usage of environment-friendly and efficient technologies, such as electric arc furnace (EAF) in steel making. These innovations also herald a new chapter in shipping and port-building sector, with a need for robust and structurally sound port infrastructure. This shall further have the domino effect of better longevity of structures.

Till date, India remains the only large economy in the world where steel demand and consumption have seen sustained growth. India is set to become the second largest steel producer this year. Additionally, it is expected to become the second largest steel consumer in the coming years, with the tailwind of rapid infrastructure construction and a thriving automobile, railway, port-building and shipping sector. The coming years shall be an important chapter in India’s growth story.

The writer is Joint MD and CEO, JSW Infrastructure.
Source: The Hindu Business Line

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