Indian analytical firm, Crisil, has projected the revenue of the overall Indian steel industry to rise by 50-60pc this year, as compared to 2020, as domestic demand witnessed a 15-17pc growth, according to reports.
Micro, small, and medium enterprises (MSMEs), however, could witness a lower growth due to their higher share of long steel products, Crisil added.
The firm said, they projected long steel prices rising 26-28pc this fiscal, but the growth will be lower than a 48-50pc growth projection for flat steel. High iron ore and coking coal costs could impact margins.
MSMEs comprise of around 90-95pc of re-rollers and were the most affected by the COVID-19 pandemic because of their low export potential, transportation, labour issues and raw material shortages due to operational delays in the iron ore mines in Odisha.
Additionally, MSMEs largely produce long steel, pig and sponge iron which has minimal trades in the international market. The domestic market contributes to 97-98pc of MSME steel sales which reflects their dependence on domestic demand and supply.
Contrastingly, large steelmakers remained unaffected by the COVID-19 pandemic as large export volumes softened the blow of low domestic demand. Thus, they witnessed a quick demand recovery as steel prices soared and earned high profit margins by the end of FY21.