India's Steel Demand, Output To Surge: JSW.

Steel consumption in India, a major world producer, is seen rising to about 130 million tonne in 2020 from about 67 million tonne this year as growing incomes and urbanisation drive demand, a senior industry executive said on Thursday.

"Steel consumption will nearly double by 2020," Sharad Mahendra, senior vice president in charge of sales at India's leading steel producer JSW Steel Ltd, told a steel conference organised by Metal Bulletin.

The construction sector, which accounts for about 50% of galvanized steel consumption, will be the main demand growth driver, with demand from white goods and automobile industries rising too, he said.

JSW Steel has cut its 2020 steel consumption forecast from an earlier expectation of an about 200 million tonnes, in line with the government forecast reduction, due to delays in some projects to boost production capacity, Mahendra told Reuters on the sidelines of the conference.

India's steel output is expected to rise to more than 150 million tonne in 2020 from close to 70 million tonne this year and about 80 million tonnes in 2012, he said.

India produced 66.8 million tonnes of steel in 2010 and was the world's No. 5 producer, according to data from the World Steel Association.

JSW Steel total annual production capacity is expected to rise to 35.3 million tonne in 2020 from 14.3 million tonne this year thanks to new green field projects in India, Mahendra said.

JSW Steel's capacity has increased from 11 million tonnes after taking over a smaller rival Ispat earlier this year, he added.

India's total production of coated steel which is used in environments requiring corrosion resistance and includes zinc-covered galvanized steel, is expected to rise to more than 6 million tonne in 2013 from 4.7 million tonne this year, Mahendra said.

India's current coated steel production capacity stands at 6.2 million tonne, he said.

Gorkem Bolaca, general manager of the steel division of trading company LN Metals, said overall world demand for coated steel has slowed down in the past few months due to concerns about global economy, sovereign debt problems in Europe as well as summer holidays.

But demand from developing countries remained very strong and has been offsetting sluggish demand from developed countries in the overall picture, Bolaca said.

"For steel demand, 2011 not as good as 2010 but not as disastrous as 2009. In 2012 ... we expect an increase in demand but not a full recovery (to pre-crisis levels)," Bolaca told Reuters at the conference.

Mahendra said India is expected to export about 1 million tonnes of coated products this year, with Middle East and Africa accounting for 32% of exports and Europe for 22%.

Japan's JFE Holdings holds a 14.8% stake in JSW Steel.

Source : moneycontrol.com