Analysis of Factors Influencing Steel Demand: A Structural Equation Modelling Approach: Fid-Bau Portal

Analysis of Factors Influencing Steel Demand: A Structural Equation Modelling Approach

Kumar, Vishant / Kumar, Ramesh

Understanding the demand for its products is essential for ensuring the long-term success of any industry. Typically, the requirements of other enterprises and various economic factors have a complicated relationship with a sector's demand. To obtain accurate results, employing a scientific method of factor selection followed by demand forecasting is very important. Current work focuses on identifying and categorising the indicators affecting steel sector demand. Initially, these indicators were selected based on previous studies and surveys from industry professionals to determine the most critical factors. Here, structural equation modelling is utilised to study these variables, assess their importance for influencing steel demand, and classify them into economic and intensity of use. Structural equation modelling is a multivariate statistical analysis technique used to analyse structural relationships. This technique is a combination of factor analysis and multiple regression analysis, and it is used to analyse the structural relationship between measured variables and latent constructs. Hypotheses are proposed, and a structural equation model is developed. This categorisation improves the effectiveness of indicators and proves helpful for a better estimation of the demand. Software SPSS and AMOS are utilised to examine the reliability and validate the data obtained from the questionnaire. The results show that both factors positively impact the demand in the steel industry.