Funding the main challenge for Indian steel growth

India’s steel production is expected to almost double by 2025 and M&A activity could result in a leaner industry, but headwinds remain, including tight credit lines and exposure to raw material prices. S&P Global Platts spent a week in India in November, mainly to host our Steel Markets Asia conference in Mumbai, but also to meet with companies and visit operations. There was plenty of positivity about the state of the local steel market, as well as a few notes of caution. S&P Global’s Indian subsidiary CRISIL predicts steel demand will grow around 7%-8% CAGR in coming years, driven by significant infrastructure investment, new affordable housing developments and strong auto sector growth. The industry consolidation process currently underway will make the steel industry more efficient and robust, and provide a more solid growth platform, most believe. Once all of the bigger assets, such as Essar Steel and Bhushan Steel, have been acquired and integrated, another round of M&A among smaller “secondary” producers – which comprise at least 40% of the total industry in terms of output – is expected to take place. This year Indian monthly crude steel production sneaked past that of Japan, making it the second-largest producer after… continue reading

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Source: CTRM Center

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