Steel Sales Rise 27% In July-Dec

The steel industry appears to have finally turned around, with domestic sales rising 27 per cent between July and December 1999, compared with the same period in the previous year.

Sales in the April-December 1999 period increased 18 per cent over the same period in the year, but the turnaround has come largely in the second and third quarters. Steel exports in the last nine months zoomed 149 per cent to 1.49 million tonnes from 5,98,000 tonnes in the same period last year.

Significantly the steel exports out of India in the October December quarter alone were 645,000 tonne, which was in fact higher than exports in the first nine months of last year (April-December 1998-99). The big jump in domestic sales came in the last six months, with sales rising to 43,54,000 tonnes from 34,16,000 tonnes in the corresponding six months last year.

 

Interestingly the domestic price for hot-rolled coils has gone up by around Rs 1,200 per tonne while the international prices have moved up by around Rs 2,000 per tonne in the corresponding period, an implication that the domestic steel industry is poised for yet another price hike.

The boost to the steel sector has come from an improvement in the performances of the user sectors. The auto industry alone has seen vehicle sales improve to 23,67,207 units in the April-December 1999-2000 period as against 21,93,220 units in the corresponding period last year. The white goods industry too has witnessed an improvement as has the overall industrial sector. The smaller down stream sector too has stepped up exports in the last few months.

The only blip in the overall scenario has come from the anti dumping duty slapped by the European Commission on Indian steel. The industry is expected to take up the issue with the Centre. However the EC duty is for steel sold in European markets at less than $287 a tonne. But with Indian steel commanding a $300 -$310 per tonne price the domestic producers are unlikely to come under the purview of the EC duty.