India’s domestic steel demand will remain buoyant despite international steel prices likely to remain firm at least for the next few years, according to an Assocham study.
‘The domestic demand will remain buoyant,’ the Assocham Eco Pulse sectoral study on steel said, adding global demand would grow at 7-8 per cent per annum while production was set to increase by less than 4 per cent.
The study ‘The Steel Surge’ said international demand would continue to come from the growing economies of China, US and Europe.
‘Domestic demand is rising on the back of development in infrastructure and growth in housing and construction sectors. A large number of high rise buildings in metros is having a demonstration effect on other cities as well,’ Assocham president Mahendra K Sanghi said while releasing the study.
There will be a significant demand for steel in India on account of the Commonwealth Games scheduled for 2010. Infrastructure, automotive, capital goods and construction sectors will be the major drivers for growth in domestic demand, according to the report.
Internationally, consumption is expected to grow in NIS (Newly Independent States) of the former Soviet Union as well as in OECD economies.
The Japanese economy is also expected to turn around after a prolonged recession, it added. Besides this, steel prices will continue to remain on the higher side owing to a rise in input costs, it said.