Vale CEO sees India doubling steel output within a decade

Vale CEO Gustavo Pimenta has highlighted India's potential to double its steel production capacity within the next five to seven years, positioning the country as a key growth engine for the global steel industry. India's steelmaking capacity is currently around 180 million tonnes, and Pimenta anticipates 300 million tonnes by the end of the decade. This growth is driven by India's expanding infrastructure needs, a growing population, and supportive government policies aimed at boosting industrial output.

India's steel demand is expected to grow significantly, with consumption projected to rise from 149 million tonnes in FY25 to 192 million tonnes by 2030, reflecting a CAGR of 6%. The construction and infrastructure sectors are expected to account for over 60% of total steel demand, fueled by large-scale public investments and rapid urbanization. Additionally, the automobile and general engineering sectors are anticipated to contribute 23% of total demand by 2030.

The Indian government has introduced several initiatives to support the steel industry, including Production Linked Incentive (PLI) scheme for specialty steel, which aims to attract investment and expand capacity. The National Steel Policy 2017 outlines a vision of achieving 300 million tonnes production capacity and 160 kg per capita steel consumption by 2030-31. These measures are expected to enhance India's self-reliance in steel production and reduce dependence on imports.

Vale, the Brazilian mining giant, is preparing to meet the rising demand for iron ore in India by increasing its sales to the country. India is expected to import nearly 10 million tonnes of Vale's high-grade iron ore in 2025, a significant increase from previous years. Vale's high-grade ore complements India's lower-quality supply, creating a synergistic relationship supporting the growth of India's steel industry.

India's steel industry is also benefiting from its competitive advantages, including abundant iron ore reserves and low-cost labor. The country is home to the fifth-highest iron ore reserves globally, and its steel production capacity crossed 161 million tonnes. With continued investments and policy support, India is well-positioned to maintain its status as the world's second-largest steel producer and potentially overtake China as second-largest consumer.

As India's steel industry expands, it is also focusing on sustainability and decarbonization. The government has introduced initiatives such as the Carbon Credit Trading Scheme and the National Green Hydrogen Mission to support the transition to greener steel production. These efforts are expected to play a crucial role in shaping the future of the Indian steel industry and ensuring its long-term global competitiveness.