Steel demand dips to 3%, min hopes to end year at 6%

The steel demand growth in the first seven months of the current financial year was just 2.9 per cent, but the steel ministry is confident the sector would be able to post, at least, six per cent growth rate.

S Machendranathan, additional secretary and financial advisor, ministry of steel, said it seemed difficult for the industry to grow at 10-12 per cent rate, that has been a norm for the past few years.

Shuman Mukherjee, director (commercial), Steel Authority of India (SAIL), echoing Machendranathan's view, said the growth in demand would be moderated in the current year. He, however, was optimistic the growth would climb back to 10 per cent from the next year. The comments were made on the sidelines of an industry conference here.

An analyst with a domestic research company said, “Demand usually picks up in the third and fourth quarter, but this year it looked difficult because of the macro-economic issues.” He said even if, hypothetically, demand does pick up from now on, closing the year even with a six per cent growth rate looked unlikely.

The production, however, continues to outpace the demand at 8.7 per cent. The country produced a total of 40.69 million tonnes of steel in the April-October period as against 37.41 million tonnes last year.

SAIL, the state-owned steelmaker, registered a drop of 5.1 per cent in its production in these seven months. According to the data of the Joint Plant Committee, a government body tracking steel metrics, SAIL produced 5.46 mt steel as against 5.75 mt in the given period last year. Tata Steel increased its production by 10 per cent in this time, at 3.18 million tonne versus 2.90 mt.