The Indian steel sector which is reeling under the pressure of tepid domestic demand is going to see support from the Energy Infrastructure in the next few years, Union Steel Minister Shri Dharmendra Pradhan said in the ISA (Indian Steel Association) Conclave being held in Delhi.
As pointed out by Mr.Pradhan, the government intends to invest about USD 100 million (USD 1.4 billion) in setting up of energy infrastructure in the country that includes pipelines, import terminals and city gas distribution networks in the time span of next five to seven years.
He also emphasised that the Indian steel manufacturers should focus on manufacturing low cost steel for affordable housing, irrigation pipelines, and gas cylinders that can be consumed by rural population.
The Indian steel prices that were facing a lull for almost seven months during the year have recently observed an uptrend (rebar by Rs.1,200-1,300/MT, HRC by Rs.500/MT) thus bringing cheer to the domestic steel sector.
“The steel prices in the country have bottomed out and now they are set to move up from here amid uptrend in the international steel prices and inventory burn out in the domestic market”, said a spokesperson from ISA. Although few industry participants are worried that this price surge is not demand driven they also pointed out that the surge is most likely to continue in the next month also.
Apart from this, Indian steel sector is set receive a boost from the infrastructure sector also as the country aims to spend USD 1.4 trillion on infrastructure as part of its plan to be a USD 5 trillion economy by fiscal year 2025 and the infra industry accounts for about 65% of the total steel consumption.
The industry participants especially the domestic steel mills appreciated the Indian government’s decision to pull out of RCEP (Regional Comprehensive Economic Partnership) agreement given the fact that cheap steel exports from China would have flooded the Indian steel market thus further pressurizing the sector. However, they also pointed out that countries under FTA (Free Trade Agreement), Korea and Japan continues to enjoy duty-free export to India giving tough competition to the domestic steel prices.
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