While global steel production grew 15 percent from 2008 to 2012, data released by the World Steel Association (WSA) showed that India’s steel production had grown the second fastest through the last five years, with China at the No. 1 spot.
India had registered 33 percent growth in steel production between 2008-12, while China had registered 39 percent growth in the same period.
No big surprise there.
China, which produces nearly half of world’s steel, had an output of 716.5 million tons in 2012. Against China’s figures, Russia, which was in fifth place in world steel production in 2012, had clocked a mere three percent growth in output during the last five years.
India’s production grew from 57.8 million tons in 2008 to 76.7 million tons in 2012.
Japan and the US have, also not surprisingly, produced less steel in 2012 than what they had produced in 2008. And we all know the reason why – recession, leading to less demand, in turn leading to less production.
The increasing pace of demand in Asia evened out the slowdown in the West, which is supported by the WSA data. While China’s pace of growth somewhat halting towards the middle of 2012, India’s domestic needs continue to put renewed demand on steel production.
According to a report in The Business Standard, the China Iron and Steel Association (CISA) had said that because of the falling demand and rising costs, China’s steel industry had been confronted with the “greatest difficulties” in decades due to the global economic crisis.
CISA said its member companies saw profits plummet 98.2 percent to 1.58 billion yuan (about $252 million) year on year, it said in a release here yesterday. China’s crude steel output grew 3.1 percent to 716.5 million tons in 2012, down 5.8 percentage points from a year earlier, it said.
Also, especially in 2012, the Chinese steel industry had faced an even more difficult situation as the economic slowdown outside China had been exacerbated by one within that country, resulting in flagging steel prices, the association said.
On the other hand, if India’s growth story continues true to plan, the country will legitimately grab the second slot in global steel production within two years. This will also be because of new capacity additions, wherein the Indian government expects the country’s installed steel production capacity to go up to 200 million tons by 2020 from the current 90 million tons.
In fact, from the first month of 2013, Indian steel prices have started to firm up. According to some analysts, the firming up of international prices, fresh demand of iron ore from Chinese steelmakers and growth in domestic consumption all were bound to push steel prices even higher in the months ahead. Price recovery had begun, with some steel majors like Jindal Steel already announcing a 2 percent hike in the first part of January.