Strong Demand: Robust growth in the steel fabrication market

India’s strong economic growth and increasing focus on infrastructure development have given a fillip to the structural steel and fabrication market. The key end-user se­­ctors for steel fabrication in the country in­clu­de construction, energy, infrastructure, oil and gas, air­ports, railways and bridges. Despite facing challenges such as high prices and competition from substitute products, the demand for structural steel and its fabrication is expected to remain robust in India.

Indian Infrastructure takes a look at the market size, growth drivers, advantages of steel fabrication and application of steel fabrication in the construction and infrastructure sector…

Market size and key drivers

The steel fabrication market in the country is growing at a rapid pace. The country has over 5,000 steel fabricators. The industry is highly fragmented with the majority being small- and medium-sized enterprises.

The rising demand for pre-engineered buildings (PEBs) and components is one of the key factors pushing the market for structural steel fabrication. Structural steel is one of the major raw materials used in PEBs. Various end-user segments such as construction, oil and gas, railways, logistics and real estate are boosting up the demand for PEBs. When compared to the traditional construction model, PEBs of­fer significant cost benefits and a reduction in the construction time of manufacturing plants, wa­re­houses, station sheds, etc. It has been ob­served that more and more Indian construction companies have been adopting structural steel in various commercial and residential co­ns­truc­tion and infrastructure activities.

Another important factor contributing to the growth of the steel fabrication market is the focus on sustainable construction. The increasing importance of green building construction is also an important factor that contributes to the growth of PEB in India. Pre-engineered cons­truc­tion has a comparatively smaller impact on the environment compared to the con­ventional construction model. Sustaina­bi­li­ty is now being integrated into every stage of the design and building process, making modern PEBs more popular in various green construction projects as well. Additionally, the production method of the steel used for these structures helps in substantially reducing greenho­use gas emissions. Moreover, after demolition, PEBs and pre-engineered components, being 90 per cent recyclable, do not have any significant impact on the environment compared to waste such as asphalt, concrete, brick and dust.

Construction accounts for nearly 60 per cent of the total demand for structural steel making it the biggest end-use sector. The construction of metro stations, new no-frills airports, international terminals, industry corridors, power plants, railway and road bridges, etc., requires heavy steel structures. With the ev­olution of the construction industry, many new and improved methods, including steel fabrication, are now being adopted. With the increasing adoption of PEBs in India, the fabricated steel market has seen an upward trend in the country. Modern technology, machinery and computer-aided design software have ta­ken steel fabrication to the next level.

Benefits of steel fabrication

Steel is amongst the strongest and most durable materials, which makes it a natural ch­oi­ce in the construction sector. Fabrication of steel helps increase its durability as it gets coated with materials such as zinc during the process, which protects the alloy from corrosion. Further, it is also covered with fire-resistant components, which help it withstand harsh conditions such as precipitation and fire. This implies that construction using fabricated steel is expected to last longer than that using other materials.

As steel can be fabricated into a variety of shapes and sizes, it is an ideal choice for a wide range of prefabricated construction, which helps save time and cost. Steel fabrication not only provides an assurance of high-quality construction but also safety and durability. Steel fabrication also allows companies to efficiently run their daily operations, ensuring productivity and success in their various work processes. It is used in building commercial, residential and temporary structures, along with warehouses in the construction sector.

Pain points

Rising input costs, labour shortage and competition from Chinese manufactures are some of the challenges faced by steel fabricators in India. The anticipated increase in steel prices due to the increase in the price of coking coal (primary raw material for steel manufacturing) and governmental regulations and restrictions on the manufacturing of steel to reduce adverse effects on the environment are some of the major challenges faced by the structural steel fabrication market in the country.

Skilled manpower is another problem that is faced by the steel fabrication industry. Crafts­men with the required experience and skill for the steel fabrication process are difficult to find. Less experienced craftspeople may be cheaper, but their inability to deal with more complex orders or issues such as springing back can negatively impact the quality and delivery time. The right machinery and knowledge required for applying the best technique are essential to de­liver quality and strength. Further, the ass­em­bling of fabricated steel on site also requ­ir­es skilled and trained human resources.

Even though steel is a durable material, dust, oil, industrial adhesives, iron particles and other contaminants can find their way into the fabric of the steel itself, leading to structural weaknesses and flaws that can corrode and even cause failure.

Applications of steel fabrication

Steel is a popular material for building bridges owing to its strong and durable nature, which allows it to withstand heavy loads. In the road sector, fabricated steel members are used primarily in the construction of bridges and girders. Steelbridges are commonly used in transportation infrastructure projects to connect ro­a­ds and highways. Meanwhile, the use of composite fabricated steel girders for rail over/un­der bridges, as per specifications set by Indian Railways, is prevalent in the railway sector. The use of steel girders saves an enormous amount of time, eff­ort and resources. In 2021, National High Speed Rail Corporation Limited awarded a contract for the procurement and fabrication of 28 steel bridges for the Mumbai Ah­medabad high speed rail corridor. The contract of Rs 13.9 billion was aw­arded to a consortium of Larsen & Toubro and IHI Infras­tructure Systems. It is estimated that about 70,000 mt of steel will be used for the fabrication of these steel bridges, giving Indian steel industries and their allied supply chains a big boost.

Apart from this, steel fabrication is used in making roof sheets for railway stations and depots. City and Industrial Development Corpo­ra­tion of Maharashtra Limited made use of pre-engineered steel structures for the Ba­man­dogri railway station works. In March 2022, India’s first-ever stainless-steel foot-overbridge was inaugurated at the Naupada railway station in the Srikakulam district. It was fabricated with the most cost-effective and superior quality stainless steel for structural applications.

In the airport sector, prefabricated steel str­uctures are becoming the preferred choice over conventional construction methods as they offer sustainability and quicker construction. EPACK Prefab is providing PEB structures for the construction of airports under the Ude De­sh ka Aam Nagarik scheme. It is currently wor­king on developing Muirpur airport, Sarsawa (Sa­har­an­pur) airport and Darbhanga airport Phase II. Fur­ther, the Airports Authority of India has undertaken the expansion work of Trichy airport, where structural steel works are under way.

Apart from this, steel is commonly used in the construction of water treatment plants to create tanks, pipelines and other structures. The energy sector also relies on structural ste­el fabrication for various purposes. The complex shape of transmission towers is possible only because of steel fabrication. Structural steel fabrication is also widely used in the construction of residential, industrial and commercial structures.

What lies ahead

Significant growth is expected in the Indian structural steel and fabrication market in the near future. The growth is due to government initiatives for infrastructure development such as the National Infrastructure Pipeline, speedier and cost-effective construction, increasing demand from the manufacturing sector, and preference for the PEBs and pre-engineered components. Further, the increasing focus on construction of green buildings will provide a boost to structural steel fabrication in the country. The manufacturing sector is witnessing rising demand as global manufacturing companies focus on diversifying their production by setting up low-cost plants in countries other than China. This increase in the Indian manufacturing sector will also drive the demand for structural steel fabrication. Despite challenges, the steel fabrication market is benefiting from opportunities such as the government’s Make in India initiative and increasing foreign investment in the country.

Disha Khanna