Relatively slow growth prospects in major sectors such as automotive and consumer durable goods are likely to lead to a slowdown in steel demand growth in the country to 7.2% in the next two fiscal years, according to the Indian Steel Association (ISA). Meanwhile, it is expected that steel consumption in the country this year will exceed 100 million tons.
The automotive sector has witnessed muffled demand since October last year. Following this trend, growth is expected to slow in the first half of 2019. A sector that has achieved 16% growth is likely to report a much lower growth rate of 7% during the year. The demand for steel in the auto industry is expected to recover from July this year. The consumer durable goods sector in 2019 is likely to show an increase of 7%. This compares with a growth rate of 22% in 2018. It is expected that steel demand in the sector is normalizing, says ISA.
In the future, growth in the construction sector is estimated at 7.2% over the next two years, while capital goods and railways are likely to grow by 6.8% and 6.5%, respectively. Reducing the rate of GST will revive the real estate sector. In addition, a significant increase in power in the renewable energy segment is likely to increase the demand for electrical equipment. Moreover, according to forecasts, the Indian economy will grow by more than 7% in 2019 and 2020.
