ICRA Revises Domestic Steel Demand To 9-10%

New Delhi, Jun 4 (KNN) Investment Information and Credit Rating Agency (ICRA) has raised its forecast for India's domestic steel demand growth in the fiscal year 2024-25 to 9-10 per cent, up from its earlier projection of 7-8 per cent.

This upward revision comes on the back of healthy government capital expenditure and resilient demand from key steel-consuming sectors such as construction and real estate.

According to an ICRA report released on Monday, domestic steel consumption registered a robust 11.3 per cent year-on-year increase between February and April 2024.

The rating agency highlighted that government capital spending remained strong until February 2024, complemented by buoyant demand from housing and realty sectors in the subsequent months.

"Given these leading indicators, we have revised our FY25 steel demand growth target upwards to 9-10 per cent from our initial estimate of 7-8 per cent, leading to an upward revision in the sector's earnings projections for FY2025," stated the report.

Mr. Girishkumar Kadam, Senior Vice President and Group Head of Corporate Sector Ratings at ICRA, noted that the Indian steel industry has witnessed its fastest growth phase over the past three years since the global financial crisis. However, he also highlighted India's rising dependence on steel import.

"India turned into a net importer of finished steel in FY2024 after a gap of five years,” Kadam remarked.

With the global economic outlook remaining subdued over the next few quarters, we anticipate domestic steel imports to further increase by 13-14 per cent in the current fiscal year, leading to India remaining a net steel importer in FY2025 as well," he added.

The upbeat domestic demand projection comes amid concerns over rising steel imports, posing challenges for the local steel industry in maintaining its growth momentum.

(KNN Bureau)