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New Delhi, Mumbai: Steel and cement sectors, which are crucial indicators of the country’s economic health, are slowly and steadily on the revival road.
With the Budget 2009-10 giving emphasis on infrastructure, it is expected that demand for these two commodities would sustain, leading to higher growth.
Speaking at an industry conference in New Delhi on Wednesday, steel secretary P K Rastogi said that the ministry is expecting to record a good growth in the current fiscal. “The average growth rate of steel production between April-June 2009 was 3.4%. In April-June, the steel consumption recorded a growth rate of 5%,” he added.
During April, domestic steel production grew 3.7%, but fell to 1.1% May 2009. However, the growth rate increased to 5.3% in June. As regards steel consumption, in April, the growth was 0.1%, which went up to 7.5% in May and registered a growth of 3.8% in June.
In the conference, steel minister Virbhadra Singh said, “We have chalked out an action plan for the next 100 days with a focus on achieving the target of 124 million tonne capacity by 2011-12. We have planned modernisation and capacity expansion programmes in leading steel PSUs”.
Similarly, despite concerns on slowdown leading to excess supply pressure, the 224-million tonne cement industry has surprisingly shown strong growth in the last six months, after having reported dismal growth till October 2008. Cement dispatches grew by 8-10% in the last five consecutive months till May 2009. After a strong revival in cement despatches, the momentum continued in the beginning of FY2010 as well. The growth in cement consumption was mainly on account of higher government spending on infrastructure projects and strong demand from personal home building activity in rural and semi-urban areas, say industry players.
In line with volume growth, cement prices have also improved. On an all-India basis, cement prices have increased by Rs15-20 per 50 kg bag from February 2009 to April 2009.
The price hike is again on the back of strong demand arising from infrastructure projects, personal housing construction in rural and semi-urban areas and supply shortage in some areas. However, for May 2009, the prices have remained stable across the country.
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