Source: The EconomicTimes
Anglo-Australian mining giant BHP Billiton has forecast Indian steel demand will double by 2025, even as it termed the government’s steel production target of 300 million tonnes by 2030 as “aspirational”.
“Steel is going to be a great enabler for the Indian growth story, particularly for the downstream sector,” Huw McKay, vice-president, analysis and economics, at BHP Billiton, said on phone. “Using 2016 as the base, we expect the demand to double to roughly around 170 MT by 2025,” McKay told ET.
India produced 97 million tonnes of crude steel in 2016-17.
McKay said construction and infrastructureNSE -1.82 % would occupy the “lion’s share” of this growth in demand, with steel consumption growing almost at the same clip as the sector—at 8% till 2025.
But the economist maintained that the government’s steel output target of 300 million tonnes by 2030 is “aspirational”. He, however, conceded that the acceleration of insolvency proceedings should assist the sector and will also give it an upside.
The company, which also exports copper concentrates to India, said the shutting down of Vedanta’s 400,000-tonne plant at Tuticorin amid bloody protests in May has impacted its shipments to India, but the international price of copper has stayed strong. “This speaks of the resilience of the copper market,” said McKay.
An international trade war sparked by the US imposing import tariffs of 25% and 10% on steel and aluminium, respectively, has countries guessing its effects and coming up with their own strategies to counter a likely dumping in their respective countries. McKay, however, said there is enough demand in the world to absorb the steel.
“There is a very broad-based growth of demand in the global economy,” he said, adding that with India exporting to neighbouring economies rather than “far flung markets”, there is not much cause of worry. McKay said BHP is not in favour of any kind of protectionism.