It is tough to find a bright spot in the global steel sector, as prices plunge and struggling Chinese producers flood world markets with their surplus stock. But if pressed, gloomy industry-watchers see at least some reason for optimism in Asia’s second-largest emerging market, India.
“There is really only one location that has the long-term potential to pull the global steel market out of its current slump, and that is India,” says Edwin Basson, director-general of the World Steel Association, a trade group. “But, and this is the big question, while India has huge unfilled demand and a big economy, when will all this be felt?”
India is already the world’s fourth-largest steel producer and is expected to overtake the US for third place in the next year or two. And while its steel consumption is barely a tenth that of the world’s largest user, China, it is at least expanding. Growth will be 8 per cent next year, according to Fitch, the rating agency.