Slowdown blues: Steel industry reels from poor demand, wafer-thin margins

Steel output has contracted for two consecutive months, after at least four years of continuous expansion.

Until each department made a commitment to how exactly it would contribute towards cutting costs by Rs 3,500 a tonne at a meeting of the Steel Authority of India Limited’s (SAIL’s) IISCO Steel Plant last month, no one was allowed to leave the room. The meeting started at 5 pm and lasted till midnight.

That’s the measure of how serious IISCO CEO A V Kamlaker is about slashing costs. Next month’s target for the plant in Asansol in West Bengal is Rs 1,500 a tonne.

In a sluggish market, cutting costs is the only way to maintain margins. Net sales realisation has