Prospect of steel sector in India looking bright: Muthuraman

Written by Economy Bureau | Kolkata | Updated: Feb 14 2009, 07:34am hrs
The Indian steel sector is witnessing a sequential growth with demand for steel in India picking up faster than rest of the world as the construction sector has turned around from the slowdown.

B Muthuraman, Tata Steel Ltd managing director, said: "In the light of what is happening across the globe, the Indian steel demand is not bad.

"January has been better than December, December better than November and I can see February will be better than January. So we are slowly coming back," Muthuraman said on the sidelines of a conference of the foundry industry.

Muthuraman said that Tata Steel, worlds sixth largest producer, was expecting 10-15% more in February over its January growth of 26% on the back of the construction sector, which was "not doing badly."

With the automobile and consumer sectors reeling under pressure, the steel demand was still below the usual. Tata Steel, he said, has no plans of stalling its expansion in Jamshedpur,, which is to be taken up from 6.8 to 10 million tonne, and is also implementing its 6 mt project at Kalinganagar in full swing. But the Tatas would now refrain from any overseas acquisition although acquisition of raw material assets was important to it.

"We have acquired good raw material bases in Canada and Africa and those will fructify in one to two years' time. But acquisition of raw material assets is still important to us," Muthuraman said.

Although there has been recent credit rating cut by Standard & Poor's Rating Services, "funds won't be an issue for the Tatas," Muthuraman said.

Tata Steel, through its Singapore arm, bought 19.9% stake of New Millenium Capital Corp, a Canadian mining company, in October 2008. This gave Tata Steel access to iron ore reserves in excess of 100 mt. In 2007, the steel major has acquired 35% stake in Riversdale Minings Mozambique coal project.

Corus, which was the groups major acquisition in 2006, currently has an edge over other steel makers in Europe because of the several short-term measures the company took to tide over the economic downturn, Muthuraman said.