Driven by a seven per cent rise in consumption and high utilisation ratio, steel production in India grew at a compound annual growth rate of 7.9 per cent in the past five years, the Economic Survey said.
“In the last five years, domestic crude steel production grew at a compound annual growth rate of 7.9 per cent. Such an increase in production was driven by 9.8 per cent growth in crude steel capacity, high utilisation rates and a 7 per cent growth in domestic steel consumption,” it said.
India ranked as the fourth largest crude steel producer in the world during 2013 after China, Japan and the US. During the last fiscal, the country had produced 81.54 million tonnes of crude steel clocking a four per cent increase over 2012-13.
The capacity utilisation during 2013-14 stood at 82 per cent. However, steel consumption during the year grew by just 0.6 per cent, the Survey said.
Construction sector accounts for around 60 per cent of the country’s total steel demand, while the automobile industry consumes 15 per cent. Both the sectors were plagued by a slowdown in the economy.
Consumption of steel depends on the growth of the economy. A sound economy ensures higher consumption. User industries such as construction and consumer durables had a bad run last fiscal resulting in a dip in demand.