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India to become third largest steel producer by 2013

India to become third largest steel producer by 2013

Mumbai: The country is poised to be the third largest steel producer by 2013. Strong local demand and global fundamentals will drive Indian steel ouput to 100 mn tonnes from 53 mn tonnes in 2007. Steel demand is expected to grow 4-5% over next four years despite recessionary conditions in USA due to rising share of emerging countries in global GDP.
According to Goldman Sachs, global steel supply will continue to remain tight in 2008. Investors can look forward to 2009 with hope as it will present a challenging operating environment for steel producers.
Indian steel consumption has accelerated from 3.4% in FY02 to 11% in FY07 and the momentum is likely to be maintained on the back of US$540bn infrastructure investment and US$210bn capital expenditure by various industries
Among the factors that enable India to reach the third position include: higher domestic prices of finished steel due to strong local demand, lower iron ore costs due to trade surpluses, lower transportation costs due to proximity of mines, skilled manpower pool at low costs, and local coal availability, according to an assessment by Motilal Oswal Securities Ltd sent to its clients recently.  [28/04/08]


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