Editorial – January 2024
Very happy to share this annual issue of ‘Metalworld’. It has been a long tradition to compile an annual issue to take stock of the previous year. In this issue we have few industry veterans expressing their views, analysis by the experts and also the vital industry statistics. I hope you will enjoy reading and also I am benefit from the contents.
The economic growth of any region has a strong co-relation with the geopolitics and so the minerals and metals sector is also dependent on the international geopolitical situation.
Today, the uncertainty in the world is increasing. We thought the Ukraine – Russia war will get over in few weeks but even after more than a year, it is still continuing. This has not only affected international trade of Russia and Ukraine but has also damaged few shipping routes. The clash between Hamas and Israel started in early October. Everybody thought is is a question of just few days for Israel and also the problem is small and localized. Now more than four months have passed and the problem is far from over. More and more groups and countries are getting involved in this issue, directly or indirectly, and now it seems that the whole middle east region is affected by this issue. We all know that. conventionally the MENA region is a big importer of metals from Turkey, China, CIS etc. But now the future of this trade remains hung due to war like situation in the region. Also going down of China’s GDP growth rate has affected its international trade.
All the above factors have contributed to induce fluidity in the global geopolitical situation and has naturally affected the industry and mainly the international trade. This is where one can understand the rising importance of India. To understand the situation in India better, we have to take into consideration two important points. Firstly, India is a consumption driven economy (unlike China, which is a investment driven economy) and secondly, it has a small international trade component. Though in normal situations this would have been considered as a negative point, in stressful situations like today, this becomes a positive point. Also our huge population, may be a negative point otherwise, but it certainly pushes the consumption up. Most countries in the world are fearing a recession due to the disturbances mentioned above but the sentiment in India is totally different. We are expecting a robust economic growth in coming years which surely translate in to a big metals demand No wonder in the chart of Countries facing recession probability’ India rightfully assumes the last position.
Along with the primary metals sector, I understand the foundry sectar did better in 2023 than in 2022. The exports have also shown signs of upward mobility and even the domestic consumption of castings is expected to rise substantially. Not only auto but the other sectors like power, infra are also witnessing a boom and it will surely reflect in the enhanced castings demand. I am quite sure that this upward trend in minerals & metals sector will continue in 2024 as well.
Friends, this does not mean that the minerals & metals industry in India is free from all the problems and challenges. The future road is going to be corrugated and with stiff competition. Only the best is going to survive. On one hand it has a lot of opportunities and on the other, a lot of challenges.