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| Abysmally low per capita consumption of steel at 27 kilograms (Kg) in the country as compared to global majors would primarily drive demand. |
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| China has a per capita consumption of 128 Kg while the US averages around 472 kg and the European Union 428.6 kg. |
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| The Union budget for the current year put thrust on infrastructure development, leading to higher steel demand. |
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| According to the sub group on steel and ferro-alloys under the Planning Commission, the demand of steel is set to increase to 50 million tonnes by 2012. |
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| Steel capacity in the country has been gradually scaled up production but additions continued to be behind expected demand. Since 1991, domestic production has grown at a compounded annual growth rate (CAGR) of 6.6 per cent. |
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| Over the last ten years, the steel production in the country has doubled from 14.3 milion metric tonne (MMT) to 28.8 MMT. |
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| According to latest estimates compiled by the Union steel ministry, the consumption of steel for Q1 has been pegged at 7.15 MMT as against 7 MMT in same period last year. |
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| Thanks to good export performance early in the year, steel companies managed to sustain a high finished steel production of 8.4 MMT in Q1, which registered a 8 per cent growth compared to Q1 of last year. |
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| Domestic makers exported 0.925 MMT of steel in the first quarter from April to June 03. This meant 35 per cent growth in exports compared to the same period last year. |
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| The steel ministry estimates did not take into account exports of 0.12 MMT of semi-finished steel, which would enhance export figures further, a research report of a brokerage house stated. |
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| Prices of steel, however, was firm throughout Q1 with sustained growth in demand. Primary steel makers like TISCO, Sail and RINL produced about 3.5 MMT in Q1 registering growth of 6.1 per cent, while production for new generation steel makers like Essar Steel, Jindal Vijaynagar Steel and Ispat Industries at about 1.22 MMT grew at a rate of over 9 per cent. |
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| Apart from domestic drivers, the domestic makers had seized opportunities offered by global industry trends. Domestic prices reflected international price trends too. |
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| Steel industry, after a disastrous 2001-02, witnessed a rise in prices of over 50 per cent over the past year (2002-03). As a result, fortunes of many steel companies revived. |
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| The HR price trend can be taken as the base price trend as further products down the chain like CR coils and galvanized follow the HR trend. |
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| There is usually a $100 differential between HR and CR coil prices while there is a $180-200 differential between HR coils and galvanized products. |
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| A look at price trends in the last nine successive quarters shows the rise in HR and CR coil prices, rising faster since April 2002. In June 2003, prices ruled at $320 for HR coils and at around $410 for CR coils. |
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