Steel capacity utilisation levels set to drop further to 74-75% in FY21

Increase in the number of secondary steel units, despite production of the alloy remaining stagnant, is leading to lower capacity utilisation in the domestic steel industry. This is despite the long-term steel demand scenario remaining positive. 

Capacity utilisation in the domestic steel industry has declined to 77 per cent in FY20 from 88 per cent in FY11. The utilisation levels have been gradually sliding and, in fact, are expected to decline further to 74-75 per cent in the current fiscal year. 

“The secondary producers are playing spoilsport since they shut their small-sized units if their input cost goes up or demand comes