Amidst the entire tussle around the ban on iron ore mining
in Karnataka and a consequent drop in steel production, one trend that has gone
largely unnoticed is a steady drop in steel consumption, too.
While some might argue that it is a seasonal phenomenon and
that consumption will rebound in the festive season starting next quarter, the
latest numbers from industry body Joint Plant Committee (JPC) show that between
April and August, India’s apparent steel consumption rose by a mere 1.2%
compared with a 9.9% rise in production.
“Domestically, the
demand is very weak and expectations of a pick-up are also dismal despite the
festive season. Therefore, while companies in the South are scaling down
production due to unavailability of iron ore, they might have done this
nevertheless,” said a prominent steel exporter.
India, which is still a net importer of steel, is seeing a
drop in import of the product too as the domestic demand is not robust at all,
said the exporter.
With Europe and the US busy dealing with their own economic
woes, the export market too looks grim in the medium term, say industry
experts.
According to JPC data, in the first five months of this
fiscal, steel exports stood at 1.6 million tonne, while imports stood at 1.7
million tonne.
Interestingly, compared with the first five months of the
last fiscal, exports have risen 54.5%, while imports have dropped 51.7%.
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