With an increase in demand from sectors such as automobile and consumer durables, India's steel consumption witnessed a 5.8 per cent rise to 17.31 million tonnes in April-July 2009 over the same period last year.
The steel consumption in the April-July 2008 period stood at 16.36 million tonnes, according to the Steel Ministry.
On the back of a firming demand, the domestic steel production rose by 3.8 per cent to 18.77 million tonnes in the reporting period as against 18.09 million tonnes in the same period a year ago.
Leading steel producers like Tata Steel, SAIL, JSW Steel reported significant growth in steel production in the last few months.
During the months under review, imports and exports went down by three and 41.3 per cent, respectively, over the same period a year ago. In the April-July period, while imports stood at 1.99 million tonnes, the exports were at 0.92 million tonnes.
However, in July, alone, imports surged by 3.2 per cent to 0.56 million tonnes over the year-ago period. Independent steel expert A S Firoz sees the current spurt in steel consumption as an indicator of "stability" in the economy.
More From This Section
"As for now it is a good indicator. The present growth is led by the demand for flat products primarily by the automobile industry," he said.
However, he said that it will be too early to predict that whether the current trend has long life or not.
He added that sharp rise in steel production and consumption will be witnessed in the coming months, mainly due to the base-effect, as output and offtakes were down in the latter part of the last fiscal.
The 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 rate of 15 per cent.
To cash in on the surge in demand for the flat steel products, leading steel producers like SAIL, Tata Steel and JSW have already increased the prices of their products by up Rs 1,000 per tonne, effective August 1.
However, prices of long steel products consumed primarily by the construction sector were cut in the range of Rs 500-2,000 a tonne due to sluggish demand amid a poor monsoon.