 "Steel industry output expected to rise")
Capacity utilisation of the steel industry is expected to pick up by about five percentage points this financial year, due to the protective measures against cheaper import and a likely rise in demand for the commodity from next month.
“Demand is expected from both flat and long products. Since the monsoon has been good, rural consumption is also expected to spurt in the coming months,” said Sanak Mishra, secretary general, Indian Steel Association.
In the year ended March, the domestic industry’s average capacity utilisation was 75 per cent. It is presently getting protection via anti-dumping duties on hot and cold-rolled products, plus a minimum import price on mainly long products.
While imports have declined with the government measures, overall demand in Jul-September is seen as largely the same as in the corresponding period of last year, in the absence of fresh consumption. “Volumes have picked up but since demand overall has remained stagnant, realisations have not picked up,” said Acharya of JSW Steel.
Essar Steel had a similar view. “Year-on-year, there is not much change in the demand pattern. Demand growth is almost flat. This is clearly reflected in lower (economic) growth. However, flat steel production is up six per cent, necessitating higher exports. These were up 12 per cent in April-July this year from last year,” said Vikram Amin, executive director.
Product prices were raised in August and September but analysts feel higher raw material costs will not allow companies to benefit. The rise in rail freight for coal is also expected to hurt.
“The price revision in products reflects the inching up of the cost curve, as coking coal and iron ore prices have moved up. Due to this, domestic steel companies might continue to see volume growth but realisations could move up only marginally year-on-year in the September quarter,” said Ritesh Shah, senior analyst with Investec Securities.
Tata Steel, Bhushan Steel, state-owned Steel Authority of India, Jindal Steel & Power and Rashtriya Ispat Nigam are the top integrated steel producers.
During April-July, crude steel production was 31.825 million tonnes, up five per cent over the same period last year, imports on the other hand were down 34% to 2.39 million tonne. Consumption of steel in the domestic industry was just a tad up by 0.5% at 26.18 million tonne on year-on-year basis, according to Joint Plant Committee data.
“Demand is expected from both flat and long products. Since the monsoon has been good, rural consumption is also expected to spurt in the coming months,” said Sanak Mishra, secretary general, Indian Steel Association.
In the year ended March, the domestic industry’s average capacity utilisation was 75 per cent. It is presently getting protection via anti-dumping duties on hot and cold-rolled products, plus a minimum import price on mainly long products.
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“Demand for flat steel products has been doing well in the past few months. We expect the demand for long products to pick up in the coming months, as construction will pick up once the monsoon ends,” said Jayant Acharya, director (commercial) at JSW Steel. Long steel products are used in the construction and infrastructure industries; flat products find wide application in automobiles.
While imports have declined with the government measures, overall demand in Jul-September is seen as largely the same as in the corresponding period of last year, in the absence of fresh consumption. “Volumes have picked up but since demand overall has remained stagnant, realisations have not picked up,” said Acharya of JSW Steel.
Essar Steel had a similar view. “Year-on-year, there is not much change in the demand pattern. Demand growth is almost flat. This is clearly reflected in lower (economic) growth. However, flat steel production is up six per cent, necessitating higher exports. These were up 12 per cent in April-July this year from last year,” said Vikram Amin, executive director.
Product prices were raised in August and September but analysts feel higher raw material costs will not allow companies to benefit. The rise in rail freight for coal is also expected to hurt.
“The price revision in products reflects the inching up of the cost curve, as coking coal and iron ore prices have moved up. Due to this, domestic steel companies might continue to see volume growth but realisations could move up only marginally year-on-year in the September quarter,” said Ritesh Shah, senior analyst with Investec Securities.
Tata Steel, Bhushan Steel, state-owned Steel Authority of India, Jindal Steel & Power and Rashtriya Ispat Nigam are the top integrated steel producers.
During April-July, crude steel production was 31.825 million tonnes, up five per cent over the same period last year, imports on the other hand were down 34% to 2.39 million tonne. Consumption of steel in the domestic industry was just a tad up by 0.5% at 26.18 million tonne on year-on-year basis, according to Joint Plant Committee data.