India’s steel consumption is ready to break records this year, compared to the performance in 2020 when demand fell as the pandemic impacted the economic activity.
Economic activity in India has recovered as a deadly second wave of infections reduces. The International Monetary Fund (IMF) anticipates India to rise 9.5% this year. That’s in contradiction to last year, when the economy shifted into an unprecedented 7.3% reduction, as a nationwide lockdown brought the country to a halt.
According to Seshagiri Rao, joint managing director of JSW Steel Ltd, steel demand is likely to grow 17% to 110 mt in the year starting April. Steel Consumption in 2020 dropped year-on-year for the first time in at least a decade-and-a-half.
Rao, in an interview, told the media that surging power consumption and mining activity, along with higher tractor and passenger vehicles sales, is increasing demand for the metal.
He said that they observed a good recovery in June and July. Likewise, Construction demand will pick up after the festive season.
On Thursday, shares of Indian steelmakers jumped.
JSW Steel improved 3.3% in Mumbai and was heading for the highest close since May 10. Competitors Steel Authority of India Ltd grew 4.6% and Tata Steel Ltd surged 5.4%.
On Thursday, ArcelorMittal Nippon Steel India Ltd told the media that domestic demand displayed signs of recovery toward the end of the last quarter, particularly from the automotive, white goods and infrastructure sectors.
Rao said that the higher local demand is likely to affect exports, which rose to 17 million tons last year. Shipments will drop slightly below that level this year as steelmakers redirect more supply to satisfy local demand. JSW exports will remain constant at the 4 million tons exported last year.
JSW Steel, which recorded its best quarterly profit in the three months through June, told the media that higher volumes and rising local demand is assisting the company balance the increasing input costs.
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