Indian economy is seen as one of the few growing economies in the world. In spite of the general slowdown in the world, depressed oil prices, demand stagnation, India managed to put up a decent growth rate of around 7 % in the fiscal 2016-17.
The main drivers of the economy were steady performance by manufacturing as well as service sector, infrastructure development projects and a good performance on agriculture front. Of course, good monsoon in 2016 has been a boon and helped to strengthen the financials of the people associated with this sector. This has further helped to keep the demand curve climbing up.
As far as the metals industry is concerned, the major customer industries are automobile, construction, engineering and the metals requirement in mega infra projects. I do agree that all these sectors did not show a sparkling growth but have certainly given some push to the metals demand. Primary metals producers are planning and even implementing capacity expansion plans. The component and engineering industry was earlier looking aggressively for the export markets. Today, conventional export markets are either stagnated or dried up. Thus the component industry needs to look at the emerging markets and at the same time, consolidate their presence in domestic markets.
As I see the things, gradually positive sentiment is growing, the industry is regaining the confidence and have started planning for the future. A lot of infrastructure projects had been announced earlier. Now is the time to execute them. Industry too is banking on these government funded infra projects as these are the major triggers for metals demand to rise.
The downstream industries like casting, rolling, extrusion too depend heavily on auto, transport, construction, power and if Indian economy can achieve higher growth rate than the previous fiscal, everything will start falling in line.
After many years of fight, debate, deliberations, finally the present government has managed to pass the long awaited GST bill which is expected to be implemented by July 2017. This is surely going to start a new era in the India economy and is expected to simplify the tax structure. Further, the manufacturing sector (which includes our metals sector) is expected to gain from this change and to certain extent, will help to reduce the stress within the industry.
This seems to be the right time to do a bit of futuristic planning and to take a little bit more risk!