Fall in global steel demand to hit domestic steelmakers

The steel industry in India would be hit by the projected 15 per cent slide in global steel demand in 2009 and profit margins of the domestic steelmakers would be impacted despite 60 per cent fall in coking coal prices in the international market.

This was pointed out by the veterans of the Indian steel industry at the 13th International Conference on Clean, Green and Sustainable Technologies in Iron and Steel Making held in the city.

“Global demand for steel is set to contract by 15 per cent in 2009 and this will impact the domestic steel industry.

Following the economic meltdown, there has been a fall in demand for steel among the steel consuming industries and the biggest blow has come from the automobile sector”, said HM Nerurkar, executive director (India and South-East Asia) of Tata Steel Limited.

He pointed out that in the aftermath of the economic downturn; the demand for steel has dropped by 7 per cent in USA, 25 per cent in Latin American countries, 22 per cent in CIS (Commonwealth of Independent States) countries and 20 per cent in rest of Asia. Talking on raw material prices, Nerurkar said, “There has been a decline in prices of raw materials like coking coal.

However, steel prices have fallen to the level of 2007 while raw materials have not dropped to that level.” PK Bisnoi, chairman and managing director, Rashtriya Ispat Nigam Limited (RINL) said, in October last year when the global economic meltdown started, the steel prices fell by 30 per cent while raw material prices during that period were three times higher than the previous year.

Speaking on the occasion, V Shyamsundar, managing director, Durgapur Steel Plant, a unit of Steel Authority of India Limited (SAIL) said, the global steel demand is set to fall by 15 per cent in 2009 and this is not a good sign for the steel industry.

He stated that massive investments were needed in the infrastructure and construction sectors to boost the domestic steel demand as these sectors accounted for 65 per cent of the total steel demand in the country.

The steel output of SAIL which currently stands at 11 million tonnes is projected at 20.5 million tonnes by the end of 2011-12, he said.