Construction Industry News
India's steel demand will slow down in the next financial year starting in March due to major disruptions caused by the massive general elections. Analysts and industry leaders expect delays in government initiatives and infrastructure investments due to the electoral process.
India, the world's second-largest crude steel producer, has seen rapid growth in steel demand thanks to continued government spending on infrastructure projects, positioning itself as one of the world's fastest-growing markets for the alloy despite a slowdown in global demand.
Projections indicate that steel demand will see a more moderate increase of 7% to 10% in fiscal year 2024-2025, a slower pace compared to the projected growth of 11% to 12% in the current year through March 2024, as described by industry experts and analysts.
As Prime Minister Narendra Modi's Bharatiya Janata Party competes for a third term in the next general election in early 2024, India's electoral process, known as the world's largest democratic exercise, is taking weeks due to staggered voting.
Fitch Ratings forecasts a 9% rise in finished steel consumption in India for FY25, after a 12% rise in FY24. However, India is expected to maintain its position as the top steel market. global growth for steel.
The construction sector, a crucial driver of the Indian steel market, saw robust growth, registering a year-on-year growth of 13.3% in the July-September quarter. However, analysts such as Puneet Paliwal of London-based CRU Group anticipate a slowdown in steel demand growth driven by government capital spending in 2024, especially in the first half of the year.
Despite hitting a five-year high in steel consumption between April and October, India has witnessed a rise in steel imports, hitting a four-year high. Industry officials have expressed concern about higher raw material costs, and the combination of higher imports and slower demand is expected to worsen the challenges facing Indian steel mills. Although the government recognizes the increase in imports, it has indicated that it wants to monitor the situation
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