Domestic demand for finished steel to grow by 8% this year: ICRA

New Delhi: The demand for finished steel in India is expected to grow by eight percent this year as compared to 2021, according to rating agency ICRA. Supported by the government's infrastructure-led growth model, domestic finished steel demand has registered a double-digit growth of 11.9 percent in the first eight months of the current fiscal, the ratings agency said in a report on Wednesday. The demand is "poised to close the year with a growth of 7-8 percent growth for FY 2022-23," ICRA said.

ICRA maintains 7.2% GDP forecast for FY23

Domestic steel companies to face hurdles due to inflation & rising interest prices: ICRA

However, domestic steel companies "face a bumpier road ahead" as the external environment becomes more challenging due to elevated inflation/ energy prices and rising interest rates. Given the expectation of a slowdown in the pace of economic activity over the next few quarters, domestic steel demand growth is likely to moderate to 6-7 percent in FY24, ICRA said.

Jayanta Roy, Senior Vice-President & Group Head – Corporate Sector Ratings at ICRA, said that dependence on external financing to meet committed expansion plans is likely to increase. A gradual increase in the steel industry's borrowing levels has already been noticed during the first half of ongoing FY23, he added.

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