India's steel consumption rose by 5.7 per cent to 26.49 million tonnes in the first six months of the current fiscal over the same period a year ago on account of improved demand from sectors like automobile and consumer durables.
The steel consumption in the April-September 2008 stood at 25.07 million tonnes, according to the provisional data obtained from the Steel Ministry.
However, the domestic steel production rose only by two per cent to 28.49 million tonnes in the reporting period as against 27.93 million tonnes in the year-ago period.
The deficit was met by one per cent increase in steel imports to 3.22 million tonnes and 43 per cent decline in exports to 1.34 million tonnes, Steel Secretary P K Rastogi said.
"The steel consumption and production trend in the first half of the current fiscal has been very encouraging. The scenario is expected to improve further in the remaining six months," he added.
Leading steel producers like Tata Steel, SAIL, JSW Steel have reported significant growth in steel production in the last few months. However, there was a marginal dip in both steel consumption and demand in September, which the secretary described as a temporary phenomena.
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Rastogi said that last month both steel consumption and production increased by 0.5 per cent to 4.30 million tonnes and 4.66 million tonnes, respectively, over the year-ago period.
In September, imports went down by 39 per cent to 4.71 lakh tonnes as against 7.7 lakh tonnes in the same period a year ago. Steel exports also dipped by about 48.50 per cent to 2.08 lakh tonnes as compared to about four lakh tonnes shipped in September, 2008.
"India is poised for a double-digit growth in terms of both steel production and consumption in the current fiscal, " he added. The World Steel Association expects the country's steel demand to grow by about nine per cent in 2009.
Asked, if steel prices are bound to follow the positive consumption and production trend in the sector, Rastogi said, "The prices have been more or less stable in the April-September period and are likely to remain stable in the coming months."
Steel consumption and production as well as its prices came down sharply during the October-December period last year on account of the global economic slowdown. Steel makers have now revived their production and have also increased the prices of their products in the last few months in view of the increase in demand.
Steel prices in the domestic market currently hovers in the range of Rs 32,000-50,000 a tonne.