Steel demand: Diversion of oxygen for Covid adversely impacts steel production
Steel

Steel demand: Diversion of oxygen for Covid adversely impacts steel production

India has always been considered a major player in the global steel industry virtue of domestic availability of iron ore and cost effective labour. In 2020, India’s steel consumption was 88.5 million tonne (MT) with a sharp 20% contraction in March 2020 due to the onset of Covid and consequent measures.

After the 13.7% decline in 2020, India’s steel demand was expected to rebound by 19.8% in 2021. But when the second wave hit India, stronger than before, India’s steel market which was slowly reviving, took a hit again.

The second wave of Covid-19 had a different impact on the industry as compared to the first wave. Reason being the lack of oxygen. Amidst the rising need for medical grade oxygen, on April 25 the government put down some restriction on use of oxygen for industrial purposes. The main industries which were affected by this were the steel and oil industries. This combined with labourers returning home, as several states announced lockdown, adversely affected the steel production in the month of April. The steel production slowed down in April 2021 after reaching 10 mt in March, which is a 20.6% m-o-m fall. Consumption also fell by 25.7% m-o-m. Export of steel also fell by 13-15% owing to this oxygen diversion.

Steel producers have observed a fall in output over the last couple of months because of the oxygen diversion for medical use but according to industry insiders profitability will likely remain stable due to high prices. Some top players of the industry who witnessed a significant fall are Tata Steel and Steel Authority of India who fell by one-third as compared to the one year ago period. Likewise JSW steel also fell by 18.6%. According to some companies, reduced steel output is an obvious repercussion of diversion of oxygen for medical use but production is not more important than rising to the occasion and helping the country fight the pandemic.

As of April 2021, the World Steel Association forecasted that demand growth for India in 2022, will be low at 5.9%. After the steel production decline in the last two months, this number may change. However, as of May 31, government officials confirmed that due to the fall in demand for medical use of oxygen, the government is planning on lifting the restrictions and allowing use of liquid oxygen for industrial purposes again. This has come as a breath of fresh air for steel producers. The lifting of these restrictions could shoot up the production and output and hence provide a push towards the industry's recovery.

Click here to read Annual Steel Report for 2021

Image Source

India has always been considered a major player in the global steel industry virtue of domestic availability of iron ore and cost effective labour. In 2020, India’s steel consumption was 88.5 million tonne (MT) with a sharp 20% contraction in March 2020 due to the onset of Covid and consequent measures. After the 13.7% decline in 2020, India’s steel demand was expected to rebound by 19.8% in 2021. But when the second wave hit India, stronger than before, India’s steel market which was slowly reviving, took a hit again. The second wave of Covid-19 had a different impact on the industry as compared to the first wave. Reason being the lack of oxygen. Amidst the rising need for medical grade oxygen, on April 25 the government put down some restriction on use of oxygen for industrial purposes. The main industries which were affected by this were the steel and oil industries. This combined with labourers returning home, as several states announced lockdown, adversely affected the steel production in the month of April. The steel production slowed down in April 2021 after reaching 10 mt in March, which is a 20.6% m-o-m fall. Consumption also fell by 25.7% m-o-m. Export of steel also fell by 13-15% owing to this oxygen diversion. Steel producers have observed a fall in output over the last couple of months because of the oxygen diversion for medical use but according to industry insiders profitability will likely remain stable due to high prices. Some top players of the industry who witnessed a significant fall are Tata Steel and Steel Authority of India who fell by one-third as compared to the one year ago period. Likewise JSW steel also fell by 18.6%. According to some companies, reduced steel output is an obvious repercussion of diversion of oxygen for medical use but production is not more important than rising to the occasion and helping the country fight the pandemic. As of April 2021, the World Steel Association forecasted that demand growth for India in 2022, will be low at 5.9%. After the steel production decline in the last two months, this number may change. However, as of May 31, government officials confirmed that due to the fall in demand for medical use of oxygen, the government is planning on lifting the restrictions and allowing use of liquid oxygen for industrial purposes again. This has come as a breath of fresh air for steel producers. The lifting of these restrictions could shoot up the production and output and hence provide a push towards the industry's recovery.Click here to read Annual Steel Report for 2021 Image Source

Next Story
Infrastructure Urban

DCPC Prepares for Special Campaign 5.0 with Focus on E-Waste

The Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals and Fertilisers, is gearing up for Special Campaign 5.0, to be held from 2nd to 31st October 2025. The initiative will focus on e-waste disposal as per MoEFCC’s E-Waste Management Rules 2022, space optimisation, and enhancing workplace efficiency across field offices.Special Campaign 4.0, conducted between October 2023 and October 2024, delivered notable results in record management, grievance redressal, scrap disposal, and cleanliness drives.Key outcomes of Special Campaign 4.0Records management: 2,443 physical fil..

Next Story
Real Estate

BlackRock India Leases 1.4 Lakh Sq Ft in Bengaluru

BlackRock Services India, the domestic arm of global asset manager BlackRock, has leased 1.4 lakh sq ft of office space at IndiQube Symphony in Bengaluru, according to Propstack data. The 10-year deal is valued at around Rs 4.10 billion.The lease, among the largest transactions in India’s co-working sector, highlights the growing preference of global institutions for flexible office providers. The agreement, commencing October 1, 2025, covers ground plus five floors in KNG Tower 1 at Ashoknagar, MG Road — one of Bengaluru’s prime commercial hubs.As per the lease document, BlackRock will ..

Next Story
Infrastructure Transport

L&T Bags Rs 25–50 Bn Order for Mumbai-Ahmedabad Bullet Train Track Works

Larsen & Toubro’s (L&T) Transportation Infrastructure business has secured an order valued between Rs 25 crore and Rs 50 billion from the National High Speed Rail Corporation Limited (NHSRCL) for the Mumbai-Ahmedabad High Speed Rail (MAHSR) corridor.The contract, Package T1, involves the design, supply, construction, testing, and commissioning of 156 route km of high-speed ballastless track on a Design-Build Lump Sum Price basis. The stretch runs from Mumbai’s Bandra-Kurla Complex to Zaroli village in Gujarat and includes 21 km of underground track and 135 km of elevated viaduct.Se..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?