Indian Steel Production Rise 9% During April-Jan

Indian steelmakers continued to produce more steel even as the consumption has not really picked up.

According to provisional data, released by Joint Plant Committee, a under the steel ministry, showed that while India’s steel production grew by a whopping 9% to 80.71 MT in the first ten months of the current fiscal, consumption has remained subdued growing by just 3.5% only to 68.89 MT over the same period last year.

Analysts said steel consumption has always remained subdued since the beginning of the current fiscal and it just got further eroded largely due to the demonetization effect, which brought the housing segment to a near standstill. Infrastructure sector usually consumes around 60% of the total steel consumed in any country.

Other consuming sectors such as white goods and automobiles also have not fared well in the recent months, leading to poor off-take from the consuming sectors.

The anemic domestic demand forced Indian steelmakers to look for overseas market and their efforts were paid off. During the April-January period, exports improved by a whopping 71.1% to 5.87 MT; while exports shrunk by 37.8% to stand at 6.10 MT. This made India a net exporter of steel in January.

Analysts said if the rising exports and shrinking imports trend continues for the remaining two months in the current fiscal, India may well become a net exporter of steel for the 2016-17 fiscal.

The government is taking a series of steps to enhance domestic consumption of steel. India’s per capita consumption of steel at 60 Kg is way below the world average of 234 Kg.

Meanwhile, the country has proposed to raise its steel-making capacity to 300 MTPA by 2030-31 from around 120 MTPA now. The target would be difficult to materialise if consumption does not grow in tandem.

Steel scenario (in MT) :

(Source: JPC)