India’s steel production and consumption in H1FY’22 (Apr-Sept’21) increased y-o-y, as per latest data released by the Joint Plant Committee (JPC). The low impact of Covid-19 and slow yet steady trade activities in the domestic steel market led to a rise in both production and consumption figures in H1FY’22.
1. Production update:
a) Crude steel production up 30% in H1: Domestic steel producers churned out 57.29 million tonnes (mn t) of crude steel in H1FY’22, up by a significant 30% compared to 43.96 mn t in the corresponding period last year (CPLY).
On the other hand, on a monthly basis, production volumes fell marginally by 2% to 9.67 mn t in Sept’21 as against 9.85 mn t in Aug’21. However, on a yearly comparison, the same increased by 9% against 8.90 mn t in Sept’20.
b) Finished steel production rises 35% in H1: Finished steel production spiked by 35% to 53.18 mn t in H1FY’22 against 39.26 mn t in CPLY. In Sept’21, production was lower by a marginal 1% m-o-m at 8.94 mn t and up by 5% against Sept’20.
The lower base impact and better arrangements to combat the crisis arising out of Covid-19 in FY’22 kept the momentum going. Increased number of employees helped mills to run at 90~91% production capacity in the current fiscal. However, a few steel manufacturers performed planned maintenance in view of the slow market momentum during H1.
Also, the manufacturers were able to shrug off the impact of a temporary spike in supplies of liquid oxygen to hospitals during the peak of the second Covid-19 wave in Q1FY’22 (Apr-Jun’21).
2. Finished steel consumption up 34% in H1: Steel consumption in India rose significantly in H1FY’22 to 48.95 mn t in contrast to 36.54 mn t in CPLY.
An increase in government investments and schemes under the ‘Make in India’ campaign led to increased momentum in the construction segment. Also, it is to be noted that post-Apr’21, the infrastructure segment set some new milestones as it expedited activities. However, quite recently, demand from few steel-consuming industries like white and yellow goods saw an adverse impact owing to component supplies and higher steel prices.
3. Overseas trade update:
a) Export volumes rise 18% in H1: Showing a decent increase, steel export volumes aggregated to 7.75 mn t in H1FY’22 as against 6.54 mn t in the same period last fiscal. However, the same was up by just 2% m-o-m in Sept’21 at 1.35 mn t and on a yearly note, surged by 57%.
b) Imports increase 20% in H1: Indian finished steel imports amounted to 2.40 mn t in H1FY’22 compared with 1.99 mn t in H1FY’21. The same remained up by 3% m-o-m and 29% y-o-y at 0.41 mn t in Sept’21.
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