'Domestic demand for finished steel to grow 8% this year'

New Delhi: The demand for finished steel in India is expected to grow eight per cent this year 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 per cent 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 8 per cent...7-8 per cent growth for FY 2022-23," Icra said.

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 per cent in FY24, Icra said.

Jayanta Roy, Senior Vice-President & Group Head - Corporate Sector Ratings at ICRA, said dependence on external financing to meet committed expansion plans is likely to increase going forward.