India's steel demand to inch upwards to 85.8 MT in FY'17

Driven by construction and capital goods industry, India's steel consumption is expected to grow 5.3% to 85.8 million tonnes (MT) this fiscal from 81.5 MT in 2015-16, industry body ISA said on Wednesday. Indian Steel Association (ISA), which represents the integrated steel producers in the country, expects demand for the metal to rise 5.6% to 90.6 MT in 2017-18, it said in a statement.

Domestic steel demand is forecast to consistently inch upwards in all the eight quarters during 2016-17 and 2017-18, ISA added. "Construction and capital goods sectors are likely to see an upward trend in growth, supported by higher infrastructure spending. Government initiatives by way of increments to government employees and public sector staff are likely to boost automotive and consumer durables in 2016-17," it noted.

In addition, a pick-up in rural income due to good monsoon and government initiatives to boost rural income are expected to help create sustainable rural demand, it said. "Railways and intermediate sectors are also slated to recover from low output in previous years and gain momentum from first quarter of 2017," ISA said.

The industry body said SWIP methodology was used to arrive at the forecasts, which looks at the steel consuming sub-sectors and growth there-in. Growth in almost all the sub-sectors are expected to pick up in the current fiscal year and further achieve higher growth rates in 2017-18, it added.