India's steel demand is likely to grow by 6 per cent in the
current fiscal year, nearly half the earlier forecast, as higher interest rates
squeeze demand from the automobile and construction sector, the country's top
domestic steel maker said.
Maintaining the prior forecast of 10 to 12 per cent growth
in consumption for the year ending in March is difficult in the current
environment, said Shuman Mukherjee, director commercial at Steel Authority
of India Ltd.
“Right now demand is slightly sluggish. Let's hope it
improves,” he added.
Car sales in India fell by 23.8 per cent in October, the
biggest drop since December 2000, an industry body said earlier this month,
hurt by a series of interest rate increases by the central bank and high
vehicle costs. So, The sluggish demand will keep steel prices under pressure,
Mukherjee said.
India holds 10 per cent of the world's coal reserves but
local supplies are falling short of demand as the country builds more power
plants, and as domestic projects run into environmental and land acquisition
delays.
The recent fall in input costs has been nullified by
depreciation in the Indian rupee, he said. The rupee skidded to an all-time low
on Tuesday and slumped 16.8 per cent from its 2011 high reached in late July.
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