India’s steel consumption declined by more than five per cent in September to 6.2 million tonnes compared with the earlier month, a development that indicates a weakness in the business sentiment.
Moreover, the production of the metal too went south by 1.3 per cent last month to 7.34 million tonnes compared with August 2015, latest data by the Steel Ministry’s Joint Plant Committee (JPC) showed.
“Domestic steel consumption in September 2015 (6.2 million tonnes) declined by 5.2 per cent compared to August 2015 and increased by 5 per cent compared to September 2014,” JPC said.
ADVERTISEMENT
However, in the first half of the fiscal, the consumption of total finished steel grew by 4.1 per cent to 39.14 million tonnes compared with April-September 2014-15, it added.
According to experts, although the demand in the first half shows optimism, there is a huge dip in demand when the consumption in August is analysed in comparison to July 2015.
Also there is a fall in demand in April-September as against April-August.
ADVERTISEMENT
As per the JPC, finished steel consumption grew by 4.6 per cent in April-August 2015 at 33.025 million tonnes compared with the year-ago period. In August, the demand grew by 4.8 per cent to 6.63 million tonnes compared with July and increased by 0.8 per cent compared to August 2014.
Another factor worth analysing is that global as well as domestic economic activity, particularly in infrastructure and housing, has not shown very “optimistic signs”, they said.
“In India, the government has come out with tenders and clear indications of spending on several infra and housing projects, but there is still time for them to start keeping in mind that they will go through tendering process, etc. Real estate is a still long way from revival,” a top official from a major steel producer said.
According to the JPC, crude steel production compared to August 2015 declined by 1.3 per cent in September to 7.33 million tonnes. Against September 2014, it fell by 0.5 per cent.
However in April-September 2015-16 crude steel production was 45.135 million tonnes, a growth of one per cent compared to same period of last year.
Integrated steel producers (SAIL, RINL, TSL, Essar, JSWL and JSPL) together produced 23.67 million tonnes in April-September 2015, a growth of 3.3 per cent over the year-ago period. Others produced 21.47 million tonnes, which was a decline of 1.5 per cent during the same period.