India is among the ten countries who registered a growth of five per cent or more in crude steel production in the first six months of 2019. India has performed better than the global average of 4.9 per cent growth in steel production, according to the World Steel Association. In a list of 64 countries, crude steel production in only 29 countries remained in positive, out of which, only 10 countries managed to register a growth equal to or greater than five per cent. These 64 countries accounted for 99 per cent of the global crude steel production in 2018.
“It is a positive sign for the Indian steel industry to have a growth rate more than the global average. China is devaluing its currency to help the exporters to survive amid the ongoing US-China trade war. This has also helped the global steel prices to go up in the last week,” said Manoj Jain, Director, Commodities and Forex Banking, India Nivesh to Financial Express Online. During the same time, steel prices in India have also increased by 10-15 per cent, which gave support to the steel manufacturers of India. Despite the global slowdown in the demand for steel, domestic consumption will compensate for the loss of revenue from the international market, he further added.
India is the second-largest producer of crude steel after China. However, there is a huge gap between the steel production capacity of both countries. China produces around nine times more steel than India every year. Also, the growth rate of China’s steel production is around 10 per cent, which also picks up the global average.
“It is good that the growth rate of crude steel production in India has been more than the global average but if we look at the last three months, the growth rate has been below the global average and this is a matter of concern,” said Ramesh Iyer, Product head of steel, ICEX to Financial Express Online. The installed capacity of China is much more than any other country and it produces more steel in the summer to compensate for the winters when it slows down its production in a routine way. This is also one of the factors that the global average goes up and India lags behind, he added.
Despite being the second-largest producer of steel in the world, India ranks last after Venezuela among 30 major companies in per capita steel consumption. Per capita steel consumption in India remained only 70.9 kg in 2018, whereas it was 590 kg in China and 1047 kg in South Korea, according to the World Steel Association.