India’s steel consumption continued to be anaemic even as production increased and imports fell by around 40% during the April-November period of the current fiscal, data revealed by Joint Plant Committee (JPC), a unit under the steel ministry, showed.
Steel consumption grew by just 3% during the eight-month period to 54.2 MT while production registered 8.8% jump, a trend which might create a large inventory. Declining imports have provided a highly-needed breathing space for the domestic steelmakers which raised price from the beginning of the current month after retaining them for the last there months.
Exports also rose by over 53% during the period, but in terms of volume, it remained low at 4.27 MT. Sources said India may not be able to make inroads on the export front as it is bound to face stiff competition from nations with excess capacity like China, Japan and Korea, among others.
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“Demand for steel is likely to improve after the impact of demonetisation fades away. Now, demand from the construction sector has been very poor. Industrial activity is yet to pick up,” said an industry source.
Construction sector generally consumes around 50% of the steel demand in any country. However, it has been higher at around 65% in India. Any contraction in demand from the construction sector thus has a huge bearing on the Indian steel industry. The JPC data showed that leading producers such as SAIL, RINL, TSL, Essar, JSWL & JSPL together produced 36 MT steel during the April-November period, which is a growth of 15.6% compared to same period last year. Other producers produced the remaining 28.4 MT.