With demand accelerating from automobile and construction sectors, India's steel consumption increased by six per cent to 8.22 million tonnes in the April-May period over the corresponding months last year.
The steel consumption in April-May 2008 stood at 7.76 million tonnes, according to figures of the Steel Ministry.
On the back of firming up of demand, the domestic steel production rose by 2.4 per cent to 9.24 million tonnes as against 9.02 million tonnes. Barring RINL, SAIL and Tata Steel reported an increase in saleable steel output.
During the months under review, imports went up by 6 per cent to 10.57 lakh tonnes, from 9.97 lakh tonnes, while exports plunged by a steep 40 per cent to 0.4 million tonnes as against 0.7 million tonnes.
Of the total imports, the contribution of hot-rolled coils, a key steel item, was 28 per cent at 3.5 lakh tonnes compared with 2.74 lakh tonnes.
Steel Secretary P K Rastogi said the spurt in consumption of steel, coupled with the surge in imports, are indicators that there is demand for the commodity in the Indian market.
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"This throws open an optimistic scenario for the Indian steel sector wherein production and consumption could be between 5 and 10 per cent in the current fiscal," he told PTI.
World Steel Association has forecast steel demand in India to grow by about two per cent in 2009-10, while for rest of the countries its projection is a negative growth of 15 per cent.
Asked if the rise in demand for steel could have a trickling effect on the commodity's prices, Rastogi said the rates are ought to be stable if not going down in near future.
Contrary to Rastogi's claims, steel majors like JSW and JSPL are considering a price rise, while Tata Steel and RINL have already upped the rates of some of their products by up to Rs 1,000 a tonne.