India’s steel demand is likely to increase by 10% in the next fiscal year ending March 2011 riding on the increasing spending on the infrastructure development, said the Union Steel Secretary Atul Chaturvedi on Wednesday.
‘Steel demand will continue to rise because a lot of emphasis has been put in the budget on infrastructure development,’ he said on the sidelines of a conference. Indian steel industry has remained much buoyant compared to its global peers after the global financial crisis surfaced, thank to the monetary-fiscal stimulus which pushed overall domestic demand and consumption.
Chaturvedi further said that the government was expecting about 10% increase in steel demand in 2011 from the current year’s level. Steel consumption in 2009-10 is likely to expand by 9%, higher than the 8% estimates arrived at by the steel ministry earlier.
Total steel production in the country in fiscal 2010-11 is likely to be more than 65 million tonne compared with 60-61 million tonne expected for the current fiscal. He added that as demand remained buoyant, prices were also likely to move up in a reasonable way.
Meanwhile, with the finance ministry hiking the central excise duty in the budget for FY11 from 8% to 10%, steel prices are already firming up. The excise hike amounts to around Rs 600 per tonne and the public sector producer Sail has already announced an increase in prices by a similar amount. Going forward, as demand remains strong, prices may witness further uptic.