The JPC report said that a year-to-year comparison of monthly data showed an increase of nearly 17 per cent in apparent consumption this year as compared to April, 1999 and a concomitant decrease of about 24 per cent in exports and 10 per cent in imports.

The review said that if this upturn in domestic demand continued for long, then it would bring in new tidings for the steel industry as it would reduce its dependence on the volatile export markets. Further, the recent devaluation of the rupee vis-a-vis the US dollar would definitely increase the competitive strength of Indian producers who were mostly pitted against low-cost suppliers like CIS and Brazil. Given the present trend in export markets, the JPC was of the view that it was unlikely that India would witness very large exports of the commodity in near future, while as domestic demand picks up, some supplies meant for overseas would be diverted internally.

As for projections about future demand for steel, the JPC report said that in the immediate future, sluggish conditions were likely to continue and the demand for the commodity would likely be somewhere around 26.53 million tonne for non-alloy steel.

Stocks would accumulate in almost all steel products in certain grades of CR coils, electrical steel sheets and tin plates, which are not produced domestically. Similarly, grades of alloy steel and stainless steel not produced domestically would likely face a supply shortfall.

The report added that steel products which will be influenced by global market condition are the ones slated for the export market. These included bars and rods, HR coils and plates.

The current recession in the global market which started off with the South East Asian crisis would continue to depress steel prices.For the medium and long-term, the demand projection had been 32.68 million tonne of steel by 2001-02 and a demand of 48.8 million tonne by the year 2006-07.

(PTI)