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Investment Sector: Emerging Markets Submitted by Deepyyy999 
, Student
6 months ago Add Tag |
Riding on a booming economy and escalating demand, the domestic steel consumption has grown manifold in the last few years. The Indian steel industry has registered an average growth rate of more than 10% CAGR in output in the last five years. During the same period, steel consumption has also moved in perfect lockstep and has maintained a growth rate of 10%.
Indian steel industry has entered into massive growth in steel demand as well as steel making capacities. The key growth drivers for the steel industry and the brief description of each driver are laid out below.
Construction: The construction industry has been witnessing a growth rate of 12%-14% in recent times. Steel construction is now identified with speed and since India is in need of speedy project implementation, steel is the best alternative for fast track construction. With economy surging ahead and expected increase in income levels of population, it is believed that demand for steel from this sector will continue to grow at current rates if not improve
Automobile: The domestic automobile industry has also grown at more than double-digit rates in the past five years. The Indian automobile sector is the second fastest growing market after China and has emerged as a prime demand driver for alloy steel. Automobile sector which is experiencing growth and competition is likely to be one of the major drivers for steel consumption in the coming years.
Infrastructure: Infrastructure sector comprises of roads, railways, airports and power. The 11th Five-year plan has lined up huge investments in all the above related sectors of infrastructure. The sector wise anticipated investment are $200bn in power, $80bn in railways, $48bn in roads, $13bn in ports and $9bn in airports. Because of surge in the above activities, the demand for long products of steel will be increasing in years ahead.
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