Stagnant demand and cheaper imports may have resulted in a marginal growth in consumption of steel in the first six months of the current fiscal.
"The country's steel consumption could grow marginally by about 0.5 per cent in the April-September period of the current fiscal," an official said.
The development comes close on the heels of domestic producers for the first time in the current fiscal pruning their prices by up to Rs 750 per tonne due to stagnant demand amid higher supplies.
"We have lowered the price by up to Rs 750 a tonne for the current month resulting in the price of Hot Rolled Coil coming around Rs 36,000 per tonne," said an official of a private sector steel maker.
Hot Rolled Coil (HRC) is regarded as the benchmark steel product. As on September-end last year, the price of HRC was around Rs 38,000 per tonne.
The primary factors which acted as catalysts for pruning price are stagnant demand, higher domestic production as well as cheaper imports from China and drop in exports, the official said.
Continuing with subdued consumption trend for the past couple of years, India's steel consumption grew by just 0.3 per cent to 31.17 million tonnes during the April-August period of 2014-15.
Imports have also gone up significantly in recent times for both flat and long products mainly from Japan, Korea and China. Construction sector accounts for around 60 per cent of the country's total steel consumption while automobile sector consumes 15 per cent.
While imports of flat products, used in automotive and consumer durables sectors, from Japan and Korea were on the rise for quite some time now, an unprecedented rise in imports of long products, used in construction sector, have also been noticed for some time now.
An official from a state-run PSU said that higher imports at lower prices from China has resulted in reduction of prices by it.
During the April-August period of the current fiscal, imports have gone up by a whopping 20.7 per cent to a little over 3 million tonnes, while exports have come down by 8.8 per cent to 2.3 million tonnes.
Industrial production growth remained subdued at five-month low of 0.4 per cent in August, prompting the industry to pitch for bold reforms to spur the economy.
As per World Steel Association, India's steel demand is expected to grow 3.4 per cent this year.
