Steel being the spine of all structures is one of the primary recipients of demand rubbed off from growth in infrastructure development. Until the outbreak of the pandemic, the global TMT Steel Bar market was expected to grow at a CAGR of more than 8 percent till 2023. The Indian steel industry was thriving with state-of-the-art steel mills, undergoing continual modernization and up-gradation to achieve higher energy efficiency levels. As a result, the steel industry and its associated mining and metallurgy sectors were witnessing an increasing number of investments and developments.
A report by Department for Promotion of Industry and Internal Trade (DPIIT) said that in the period of April 2000 to June 2019, the Indian metallurgical industries had Foreign Direct Investments (FDI) coming in up to US$ 11.38 billion.
Adding to the impetus had been the Government’s focus on infrastructure projects, which in turn had been furthering the demand for steel. In addition, the expected acceleration in rural economy and infrastructure had been promising for even more growth in demand for steel.
Delayed uptick in the growth
With increase in demand for low cost reinforcement bars in construction projects, there had been an uptick in the growth of global TMT steel bars market. Moreover, the much needed government support for the production of steel and coal was propelling the TMT steel bars market further. As these have high strength and ductility, the demand for global TMT steel bars was manifest. Looking to tap into this market, many manufacturers of TMT bars had ventured into this segment and were vying for their market share. Then the market got hit by the impact of the pandemic.
World Steel Association has predicted India’s steel demand to fall by 18 percent in 2020 while the global steel demand is expected to contract by 6.4 percent as per the association. “While the steel demand in the developing economies excluding China is expected to fall by 11.6 per cent in 2020. India is likely to face an 18 per cent decline in steel demand in 2020, which will rebound by 15 per cent in 2021,” said the report by World Steel Association.
Saying that the demand in India is expected to rebound by 15 percent in 2021, the factors which the report alluded to are expected uptick in consumption due to upcoming festive season and construction getting started with investment in areas such as Railways.