Sep.28 MetalBiz--Indian government's stimulus plan for a series of infrastructure projects as well as commonwealth games in 2010 will spur Indian steel demand to increase significantly. Indian ministry of steel industry predicted that the country' s steel demand would increase 8%-10% in 2009-2010, while the domestic steel industry could not fast satisfy the large demand, therefore, Indian steel import will increase dramatically in the future several months. After the global financial crisis at the end of last year, Indian steel mills postponed or cancelled the original expansion plans as other steel mills in the world. Even if some steel mills resume the halted projects, they are also unable to meet increasing demand.
The great price difference in India and international market is also one of reasons which led the import to incline. After Indian steel makers raised the price for several times recently, the steel price was relatively high in the international market. It is estimated that Bombay' s imported price of HRC is about 27,100 rupee per ton, which is equivalent to U.S.$561 per ton, while the EXW price of domestic HRC is about 31,000 rupee per ton (about U.S.$639 per ton). In recent, Indian buyers and China's exporters signed import contracts on some HRC.
Indian HRC saw a short supply. India exported 2.75mln tons of steel in April to August this year, up 4% year on year, mainly from Russia, Ukraine and France. In the same period, Indian steel production was at 23.46mln tons, up 2.7% year on year and the demand was 22.14mln tons, an increase of 6.6%. The local steel mills predicted that after rainy days passed in September, the steel demand in construction departments will incline further, which accounts for about 60% of total steel demand in India. In 2008-2009, Indian steel demand totaled 52.05mln tons and steel production was 56.08mln tons accumulatively.
Except Indian government's stimulus plan, World Bank has allotted extra U.S.$4.3bln to support the country's infrastructure construction. With the increase of construction actives, local steel mills expect to expand capacity further and began to re-operate some halted investment projects.
India as the third largest automobile market in Asia, its auto sales hiked 26% in August and the sales are expected to advance further in September and October. Another strong demand came from power generation department. Indian plans to add 78.7bln watt in March of 2012 to ease the insufficiency at the peak season and the investment is estimated to reach 10.6trl rupee. The construction of power plants needs large quantity of steel and the orders of power firms boosted dramatically in the past several months.
Source : MetalBiz