I am very happy to present this annual issue of ‘Metalworld’. I hope this makes an interesting reading and also is useful in developing the required insight and the right perspective about the minerals & metals industry.
As we all know, the metals demand lies outside the metals industry and we have to depend on other customer industry sectors such as infra, construction, auto, engineering, consumer durables etc. for the metal consumption. Out of this infrastructure itself consumes more than 70 % of metals in the country and obviously it is the biggest factor influencing metals demand in the country. Thus anything which facilitates and promotes infrastructure activities and projects should be helpful to metals industry as well. To be more specific, mega infra projects floated by the central and the state governments would consume lot of metals and thus need to be pushed hard. This includes roads (including the corridor projects) dams, air and sea ports, rails / metros and other such projects with huge metals consumption potential. One of the major hurdles in these is land acquisition. Unless we have a simple, fair and easy to execute law in place, these infra projects will keep on getting delayed attracting the time and cost escalations. This will naturally lower the metals demand growth rate. If we can overcome this hurdle, it will be a boon to not only metals industry but to the national economy as well.
The metal demand is a function of the overall state of the economy of the country. The last two years were badly affected by the covid pandemic and naturally the economies of most of the regions and the countries suffered a lot. Do we all remember that even before the pandemic erupted Feb 2020, Indian economy was not in the good shape and struggling to maintain a decent growth rate, which was falling by every passing quarter ? In fact, in my opinion, pandemic has given us an opportunity to relook and restructure our economy to some extent. With good growth rate predictions by expert agencies, the world has a better perception of Indian economy, which should result in more FDI in coming years. May be some small changes in export incentives and import duties would be welcome but I must confess that such measures would make a limited impact on the fortune of mineral & metals industry in the country.
2021 was the second consecutive year to be influenced and affected by the covid pandemic. While 2020 was an absolute bad year for the whole world, our country and also for our industry, 2021 was not that bad. Most of the industry verticals including the metals industry recovered during this year. The deepened metals demand curve came up because of the overall recovery of the economy and a strong positive industry sentiment. The year ahead too looks quite bright with most of the expert agencies have predicted a robust growth rate of around 8.5 to 9 % for the Indian economy. This should very well translate into a huge surge in metals demand in coming months. Let us hope all this comes true and ‘happy days’ are here again !