India’s steel industry clocked a handsome 10.5% growth in production during the April-December period of the current fiscal, riding on a sharp rise in output by all major producers such as SAIL, Tata Steel and JSW Steel.

However, as concern remains on the consumption front, domestic firms are increasingly looking beyond the domestic market to sell the excess quantity, joint plant committee (JPC) data revealed. Thanks to protective measures taken by the government in recent months, imports remained in the negative zone.

Data compiled by the JPC, a unit under the steel ministry, showed that India’s steel production grew to 73.77 mt during the April-December period from 66.75 mt a year ago. SAIL’s production during the period rose by 17.9 % to 8.5 mt, RINL’s production was up by 8.5% to 2.2 mt, Tata Steel’s output grew 16.2% to 8.1 mt and the combine of Essar Steel, JSW Steel and JSPL produced 22.39 mt, recording a cumulative growth of 18.3% over the corresponding period last year.

Secondary steel producers’ production, however, fell by 1.3% during the nine-month period of the current fiscal to 39.9 mt. Secondary steel producers produced roughly half of the total output in the country.

The growth in consumption, however, remained anemic during the period to stand at 61.61 mt, up 3.3% over the corresponding period last fiscal. Analysts said consumption was never buoyant during the year so far, but it got further affected due to demonetisation. However, they said things are likely to improve in the coming months as people start spending on end-use segments of steel like real estate, automobiles and white goods. Roughly about 65% of Indian steel is consumed by the construction sector.

In order to beat the domestic blues, the steel industry is increasingly looking up to the export markets, where China has the dominance. So far in the current fiscal, Indian producers have docked nearly 5 mt steel overseas, a growth of 57.8% over the corresponding period last fiscal. India had exported 3.81 mt steel in the entire last fiscal.

Imports, on the other hand, declined sharply by 37.4% during the April-December period of the current fiscal to stand at 5.49 mt compared with 8.77 mt a year earlier. Analysts said if the current trend of growth in export and a decline in imports persist for the remaining three months, India might become a net exporter of steel again after 2013-14.

Source: Financial Express