Asia's second rapidly growing economy India to have play major role in increasing the global steel demand this year. Not only India other county like Brazil, Russia and some Asian and African country also provide valuable support. But China hold the pivotal position for steel growth. Outside China these country will be main growth driver.
In a recent report published by Ernst and Young( EY) estimated that steel demand growth in the whole world may be around 3.3 percent. It is very faster than previous years.
Main Growth Driver:
- India
- Brazil
- Russia
- West Asia
- North Africa
- China
EY report said that, if urbanisation projects continue, accompanied by a strong
domestic economy and a growing middle class, it will shift demand to
more sophisticated consumer products such as cars and home appliances
which will benefit steelmakers with high-end, value-added products.
Though demand growth expectation is a good news but excess capacity remains the biggest threat to the steel sector. Permanent shutdown of inefficient capacity is the only real solution to bring balance to the market but in the short term it is difficult to see this happening given state participation in many countries and additional incentive to retain employment. According to EY estimate, around 300 million tonnes steel making capacity needs to be closed for the industry's profit margin to reach a sustainable level.
Though demand growth expectation is a good news but excess capacity remains the biggest threat to the steel sector. Permanent shutdown of inefficient capacity is the only real solution to bring balance to the market but in the short term it is difficult to see this happening given state participation in many countries and additional incentive to retain employment. According to EY estimate, around 300 million tonnes steel making capacity needs to be closed for the industry's profit margin to reach a sustainable level.
(Creative story of steelOdisha, Please do not copy it)
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