Steel makers, including the Steel Authority of India (SAIL), Tata Steel and JSW Steel, are witnessing a revival of demand following improved consumption from sectors such as construction and automobile.
“The steel sector is doing quite well now. There is an overall growth in demand. It is a positive sign,” JSW Steel Vice-Chairman and MD Sajjan Jindal said.
Steel companies saw the demand for the alloy waning due to the global industrial downturn in the second half of the current financial year. However, JSW Steel expects demand to improve by 4-5 per cent in the next fianancial year.
“This whole year, we will see a slight growth in demand, maybe by 4-5 per cent as consumption increases,” Jindal said.
Ruling out any changes in the price structure, Jindal said, “Domestic steel prices have already come down. We have already more or less bottomed out. Let’s not talk about pushing it further down,” he said.
Echoing the sentiments, other domestic producers such as Essar Steel and VISA Steel said they expect the improving trend to continue in the next financial year.
“Domestic demand is picking up. The offtake in February was better than in January. March will be better than February and the trend is expected to continue,” Essar Steel Business Group CEO J Mehra said, adding, howe ver, that the export market continues to be in bad shape.
Global steel majors such as ArcelorMittal and Posco have cut their output by up to 45 per cent due to the fall in demand. Steel prices have almost halved to $450 a tonne from highs of $1,150-1,250 a tonne seen last year. Following the trend, the Indian companies had also cut prices and output.
But the recent increase in demand has seen domestic steel mills embracing full capacity.
“Along with demand, capacity of steel mills in India are also growing in the past few months,” Visa Steel Chairman Vishambar Saran said.
The country’s steel behemoths — SAIL and Tata Steel — are witnessing a better demand for the commodity in the last quarter of the financial year than the previous quarter, mainly on improving demand in the construction sector.
