Construction Ahead!

Traction in select infrastructure segments to keep steel consumption buoyant

- Madhumita Mookerji

Steel is one of the pillars of any modern economy and it would not be wrong to say that, literally, the pillars on which bridges, highways, flyovers, underpasses and other modern, mega structures stand, have steel as their skeletal configurations. Definitely, more than 50 percent of all steels go into buildings and infrastructure. But, even if that be the case, the segment’s per capita steel use is only 31 kg, compared to an average 111 kg for other emerging economies. Which, optimists say, is a good thing because it leaves the door ajar for increased steel usage in the future. And, with construction and infrastructure set to drive growth in India, and the government of the day pushing for more steel-intensive manufacturing industries and construction practices, the per capita steel consumption is expected to increase to 158 kg in 2031 from the current 62-plus kg and 175 kg in 2025, by when the country would potentially be looking at a 250 million tons (mt) of crude steel consumption opportunity.

Further, there are other adverse factors that are likely to work in favour of India’s infrastructure development and, steel’s too. For one, the country’s per capita electricity consumption is among the lowest at less than 2,000 kWh. India’s per capita rail infrastructure is the lowest at 53 km per million population compared to 716 in the US, 610 in Russia, 476 in France and 74 in China. Large sections of the population still lives in non-metal/RCC roofed housing. India’s steel-to-cement ratio in construction is the lowest at 0.30 compared to 1.50 in the UK, 1.19 in the US, 1.10 in Germany and 1.07 in Japan.