Global prices to prop domestic steel despite near-term demand taper: Icra

Contraction in domestic steel consumption has been much lower at 9.9% in 11M FY2021 compared to a 19.6% drop during 8M FY2021 on the back of a sharp pullback in demand during December 2020 and January

India’s steel consumption growth is expected to moderate sequentially in the near term due to a surge in the number of new Covid cases in March 2021 and increasing mobility restrictions.

However, the extent of moderation is too early to estimate, given that vaccination drive is ongoing and the fact that the lockdowns being announced are not as severe as witnessed in Q1 FY2021, said ratings agency Icra today.

Despite the possibility of demand moderation, Icra expects domestic steel prices to remain elevated on the back of favourable international price trends.

In terms of demand trends, it is to be noted that contraction