Indian steel consumption dropped by 35pc in Apr-Aug from the prior period to hit 27.4mn mt, the lowest in the last six years, as per the Joint Plant Commission (JPC) report. The consumption hit the lowest since the committee started measuring data in early FY2015 (April 2014-March 2015). India’s per capita steel consumption remains at around 66kg, significantly low against the global average of 212kg. 

 

Economic activities in the country had come to standstill due to a severe national lockdown imposed amid the COVID-19 outbreak. The output of India’s eight core sectors declined by 8.5pc from the prior year to 117.6 in August, as per Ministry of Commerce data. Steel comprises of 18pc share of the country’s eight core industries index that includes coal, crude oil and electricity. 

  

Production

India’s finished steel production dropped to 30mn mt during Apr-Aug, down over 30pc from the prior year. India turned out to be a net exporter during the period as domestic demand was weak. Leading steelmakers like JSPL, SAIL and JSW steel banked upon exports during the period when China emerged as the largest buyer for Indian steel. During the Apr-Aug, India supplied 1.7mn mt of steel to China. Chinese economy recovered fast amid heavy infrastructure spending and aggressively imported Indian HRC and Billet at lower prices and quicker deliveries than from other countries. 

 

Indian steel demand is likely to take longer-than-expected to recover, but major mills anticipate festivity season to spur demand from the automobile sector. Mills have successively hiked prices of HRC in August and September by Rs2,000-3,000/mt, which is expected to extend in October. 

 

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