By Katharine Gemmell

 


BHP Group and Rio Tinto Plc are looking increasingly to India as the next big growth engine for global steelmaking, underscoring how the world’s biggest iron ore suppliers are preparing for a future beyond China.

 


Senior commercial executives from both mining companies said rising demand and the addition of new capacity in India could help offset slowing growth in China, which has dominated global steel markets for more than two decades.

 


“I was recently in India. All our customers are doubling capacity,” Michiel Hovers, BHP’s group sales and marketing officer, said during a presentation at Singapore International Ferrous Week on Tuesday. “It’s happening. It’s real.”

 
 


India is emerging as the steel industry’s most important growth market as China’s property-led expansion fades. The government in New Delhi has set a production target of 500 million tons by 2047, slightly more than triple the 165 million tons of raw steel made last year, though still far below the 961 million tons that China produced.

 


While per capita steel consumption in the world’s most populous nation remains far below that of China, rapid urbanization and government-backed infrastructure spending are expected to drive years of demand growth, creating an opportunity for global miners that supply iron ore and metallurgical coal.

 


“We’re just in the early, early days of India’s growth,” Hovers said, adding that BHP was “well-positioned to support” this expansion.

 


In the coming decade, the iron ore market can expect “substantial demand growth from the Global South, especially from India and Asean” countries, Rio Tinto Chief Commercial Officer Bold Baatar said earlier at the same event. This would help to offset the stagnation in Chinese demand, he said.

 


The global market would require about 950 million tons of new iron ore capacity, he added, not only to meet this new demand but also to counter the depletion of existing mines. Baatar argued that analysts have consistently underestimated the strength of the iron ore market, with forecasters not accounting fully for supply risks, the declining quality of iron ore deposits and the resilience of China’s steel production.