Indian steel producers, including JSW Steel and Tata Steel, are gearing up to make substantial investments in expanding their capacities to capitalise on the burgeoning domestic demand in one of the world's fastest-growing economies.
According to reports from Reuters, while demand for steel is declining in Europe and the United States, India is witnessing a surge in economic activity and a significant overhaul of its infrastructure, attracting steelmakers worldwide.
Analysts and company data indicate that major steel mills are planning to boost their capacity by at least 22 million metric tons in the fiscal year commencing April 2024.
Jindal Steel and Power is expected to augment its existing capacity of around 9.6 million metric tons by an additional 6 million metric tons, while Tata Steel plans to add 5 million tons to its current capacity of 21 million tons.
JSW Steel, the country's largest steelmaker, has outlined ambitious plans to ramp up its capacity to 38.5 million tons by 2024/25, up from the current domestic capacity of 27.5 million tons.
Although the exact investment figures have not been disclosed by the companies, analysts anticipate that the scale of expansion will involve billions of dollars.
Hui Ting Sim, Assistant Vice President at Moody’s Ratings in Singapore, stated, "We expect JSW Steel will spend USD 2 - USD 2.2 billion a year towards brownfield expansions, scaling up its iron mining capacities in Odisha, raw material efficiency projects, and downstream projects."
According to analysts, Tata Steel is projected to invest between USD 1.21 - USD 1.51 billion in the fiscal year 2024/25.
Notably, during the period of April-January, India's steel consumption surged by 14.5 per cent to reach a six-year high of 112.5 million metric tons, underscoring the bullish trend in the domestic steel market.