KOLKATA: An additional 30 million tonnes of steel-making capacity is expected to be commissioned in the next two years in the country, even as the steel ministry is working on a new National Steel Policy that seeks to factor in a higher-than-expected growth in steel demand and consumption in five years.

Of this, approximately 10 to 15 million tonnes of capacity is likely to be added during the current year itself.

"We expect some 30 MT of steel capacity to be commissioned in the next two years. Some of the planned mega integrated steel plants are also due to start production within the next five to seven years," union steel secretary PK Misra said.

In 2010-11, India produced some 78 MT of steel from both primary and secondary producers. In FY 2010, the domestic steel sector saw robust growth, particularly in the fourth quarter (January-March 2011), with rural demand providing a much-needed boost to the country's overall steel demand. "Finished steel production was up 10.6% in 2009-10 while production grew by 8.9%," Misra added.

While exports totaled about 3.5 MT, net imports of steel went up to 6.8 MT during the year, which gives an indication of domestic demand condition. Between 2005 and 2009-10, steel sector recorded a compounded annual growth rate of 9.2% with a demand elasticity of 1.1. "This is likely to be maintained," the steel secretary said.

In its short-term outlook for steel released in April, the World Steel Association (WSA) said, "India is expected to show strong growth in steel use in the coming years due to its strong domestic economy, massive infrastructure needs and expansion of industrial production."

In 2011, India's steel use is forecast to grow by 13.3% to reach 68.7 MT. In 2012, the growth rate is forecast to accelerate further to 14.3%, according to estimates by WSA. The latter represents nearly 170 steel producers, including 19 of the world's 20 largest steel companies.

Misra said India has also requested World Steel Association for a correction in the country's ranking in the global steel production sweepstakes in 2010. While the WSA has placed India at the 5th position, Misra said India's production finished the year at the fourth position.