India ranks 2nd in the world when it comes to crude steel production. The steel sector is divided into three broad categories with modernized technology used in the industry. The categories are major producers, main producers, and secondary producers.
With an estimated year-on-year growth in steel production in FY22, production of steel will reach 112-114 million tonnes by the end of FY22. And according to an Economic survey report presented by the Indian Finance minister, the production of crude steel observed a 25% of year-on-year growth from April-October time of 2021-2022.
After stagnant demand for steel due to covid crisis, there is now a steady rise. With the automobile sector and real estate sector getting back to life, the steel demand is most likely to rise because both sectors require a lot of steel.
So let us now discuss the major reasons for the rise in steel production in India:
Top 3 reasons for the Rise in Steel Production:
- Increase in Demand: There are quite several factors that are contributing to the increase in demand for steel. But, one key reason is the Russia-Ukraine conflict. Because of the war, the steel supplies for Europe is disrupted drastically. In this case, Asian suppliers like India have stepped in and met the European steel demand. Also, sectors like automobile and real estate are getting back on track which will lead to a steady increase in the demand for steel over the period.
- Government Initiatives: The Government of India has also taken a lot of initiatives to promote the growth of the Indian steel sector. Initiatives like the Steel PLI (Production-Linked Incentive) scheme aims to bring investments worth millions of dollars to the Indian steel industry.
- Increasing profits and Investments: Indian steel companies like Tata steel and JSW steel are bagging profits in their steel businesses. Tata steel recorded a profit of ₹9,573 during the December quarter. With such huge profits, the Indian steel sector is also attracting investments for its growth and development.
Many other reasons resulted in the gradual rise in steel production in India. But, these three reasons contributed largely in recent times. Because of the increasing demand and growth of the Indian steel industry, investing in it in 2022 is an optimum option to improve your investment portfolio. Here are some top Indian steel stocks, you can invest in 2022:
Top 4 stocks to invest in the Indian steel market:
- Tata Steel Ltd.
- JSW Steel Ltd.
- Jindal Steel and Power Ltd.
- Steel Authority of India Ltd.
These are a few good Steel stocks to invest in, in 2022.
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