Both flat steel and long steel are expected to be needed in India over the next few years, according to Indian steelmaker JSW Steel.
The company is one of the top producers of steel in India and is set to add another 3.2 million tonnes of capacity to its Vijaynagar plant and recently acquired Ispat operations.
JSW Steel joint managing director and chief financial officer Seshagiri Rao told The Hindu newspaper that he expected demand for steel to be strong in India.
He said: “The explosion in demand for steel over the last decade has been driven largely by flat steel demand. Now the other side of the story is picking up.
“Infrastructure spending not only from the government side, but also from the private industry point of view is set to expand, with lots of projects announced, even though there is some sluggishness this year. We expect it to pick up and give a demand for infrastructure, housing and other sectors.”
The Indian government has also signalled that it intends to slow the fiscal tightening seen in other Asian economies, over fears that a slowdown in the global economy will help to suppress Indian inflation.
In a statement, the Indian Reserve Bank said it expects its economy to grow by “around 8 per cent” this year after it increased interest rates to 7.5 per cent from 7.25 per cent in an effort to curb inflation that is currently running at around 9 per cent.
It added: “While the Reserve Bank needs to continue its anti-inflationary stance, the extent of policy action needs to balance the adverse movements in inflation with recent global developments and their likely impact on the domestic growth trajectory.”
China last week decided not to raise interest rates until it can assess what impact the European debt crisis and slower growth in emerging nations will have on its own economy.
Meanwhile, Tata Steel has agreed to sell its stake in Australian coal mining company Riverside for $1.12 billion, which gives Anglo-Australian firm Rio Tinto a 99 per cent stake in the company. This is despite the rush of Indian steelmakers looking to buy their own coal mines as the price of coking coal has more than doubled in the past year. India almost entirely depends on imports of coking coal, and this has forced up the cost to Indian steel makers.