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India to emerge 3rd largest consumers of steel

India is expected to emerge as the third largest consumer of steel in 2011, after China and the United States, buoyed by a focus on building infrastructure and strong growth in the automobile and consumer goods sectors.

Demand in India will rise 13.6% in 2011 to 68 million tonnes, the World Steel Association predicted in October. Growth in global steel demand, however, is likely to slow to 5.3% in the year, with China's demand expected to grow by 3.5%.

Here are some key facts about India's steel industry.

1. India's iron and steel industry contributes about 2% of gross domestic product, or about USD 24 billion, to the country's roughly USD 1.2 trillion economy.

2. India is now the third largest producer of steel in the world after China and Japan.

It produced 62.8 million tonnes of the alloy in 2010, but is still only about a tenth the size of China, the No.1 steel producing country.

3. State run Steel Authority of India is the largest producer, with capacity of 13.8 million tonnes. JSW Steel has annual capacity of about 7.8 million tonnes, while TATA Steel, the world's No 7 steelmaker, has capacity in India of about 7.5 million tonnes.

About half of India's steel industry comprises a large number of makers of higher-end re-rolled steel with less than one million tonnes of capacity each.



1. India's steel producing capacity is likely to touch 120.62 million tonnes by 2011/12, the federal steel ministry says. Based on planned projects, capacity could go up to 293 million tonnes by 2020.

Regional governments have signed 222 memorandums of understanding for planned capacity of 276 million tonnes.

2. India has immense scope to increase its consumption of steel. Current per capita consumption is around 40 kg, against 100 kg in Brazil, 250 kg in China and a global average of 198 kg. Steel demand is expected to rise in double digits annually for the next few years.

3. India's growing status as a small car hub is drawing global steel makers, especially Japanese firms, to the country.

In July, Japan's JFE Holdings said it would spend about USD 1 billion for a 14.9 percent stake in JSW Steel Ltd. Larger rival Nippon Steel also plans an automotive sheet steel joint venture with TATA Steel.

Steel Authority of India is also finalizing plans to set up joint steel plants with South Korea's POSCO and Japan's Kobe Steel.

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