New Delhi: ICRA stated on Thursday that there is expected to be a 9-10 per cent increase in domestic steel consumption this fiscal year.There was a strong demand for steel in the first quarter of the current fiscal year, with consumption increasing by 15 percent compared to the previous year, despite the presence of competitively priced imports. "In a statement, the rating agency stated that ICRA forecasts a solid 9-10 percent growth in domestic steel consumption for FY2025."
Demand could experience a slight decrease in the current quarter due to seasonal factors related to monsoon, after which government capital expenditure may show an increase towards the end. According to ICRA, the sector is projected to experience a record high of 88 percent capacity utilization in spite of an all-time high capacity increase of 15.6 MTPA in FY2025 and rising imports, the agency stated. For the past three years, the steel industry has been experiencing its most rapid growth since the global financial crisis.
During FY'24, the industry saw a consumption growth of 13.6 per cent, slightly below the peak of 13.9 per cent in FY2006 during the country's prime private sector capex era. As steel is traded worldwide, the external environment is vital in determining the domestic industry's health. Due to the below-average economic growth forecast in China, as well as in other major steel-producing and consuming regions worldwide, steel trade flows have been shifted towards rapidly growing markets such as India. As a result, imported finished steel from domestic sources has been consistently increasing since FY'23.
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