Steel consumption grows by 3.3% in FY13

Steel consumption in the country grew by just 3.3% to 73.3 million tonnes in 2012-13 on subdued demand due to slackening economy and high interest rates.

The consumption growth is the lowest in the last three years. It grew by 5.5% in 2011-12 and 9.9% in 2010-11, according to the data complied by Joint Plant Committee, a body under the Steel Ministry.

The consumption of steel, used mainly in construction and consumer durables, was at 71 million tonnes a year ago.

Total production expanded by mere 2.5% during 2012-13 to 75.5 million tonnes.

An industry expert said decline in consumption forced almost all steel companies to resort to curtailing capacity utilisation.
 

"The consumption of steel is a factor of many things. It depends on the growth of the economy. A sound economy ensures higher consumption. User industries such as construction and consumer durables had a bad run last fiscal. This resulted the dip in demand," the expert said.

A stubbornly high inflation and a tight monetary policy forced consumers to postpone buying decisions leading to subdued demand for steel, the expert added.