Steel consumption may grow by about 3% this fiscal: Joint Plant Committee

NEW DELHI: Despite near flat growth in the first 5 months of the current fiscal, steel consumption in India may go up by a "realistic" rate of around 3 per cent for the entire 2014-15, says Joint Plant Committee ( JPC) Chief Economist AS Firoz.

"The growth in country's steel consumption in the current fiscal can be below 3 per cent or around 3 per cent. That is the realistic scenario," Firoz said. JPC is under the Ministry of Steel.

Continuing with subdued consumption trend for the last couple of years, India's steel consumption grew by just 0.3 per cent to 31.17 million tonnes (MT) during the April-August period of 2014-15.

"If in the rest part of the year, the consumption grows by around six per cent, then the average for the entire year will be three per cent or below. It is realistic," Firoz said.

India's steel consumption grew by just 0.6 per cent in 2013-14, its lowest in four years, to 73.93 mt, impacted by a slower expansion of the domestic economy.

Firoz said consumption of steel would certainly rise from here on as lot of infrastructure projects are already in the pipeline and that was why his assessment of 3 per cent growth was "not a tall order".

"Besides, the automotive sector is reviving which will certainly pull the demand up. Capital goods sector and lot of machinery sector have also potential to do well. So, all these will pull demand," he said.

Construction sector accounts for around 60 per cent of the country's total steel consumption while automobile sector consumes 15 per cent. Both sectors have been plagued by a slowdown in the economy.