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Current Issues |  |
Indian Steel Industry - Nitin Gadkari |  |
Steel Conferences |
 June, 2020 IssueIndian steel producers are pinning hope to the Government’s stimulus package that seeks to reform - not just revive - the Indian economy with a flurry of schemes and flow of cash into the targeted sectors for growth. The COVID-19 pandemic... ... ... May, 2020 IssueThe dichotomy between the imperativeness of letting economy roll and the inevitability of nationwide lockdown including in economic activities intensified over the last few weeks. Demands became rife for measures to go all out against corona pandemic ... ... ... April, 2020 IssueThe COVID-19 pandemic and the lockdown, the countering measure as yet, have together brought the Indian steel industry, like all other industries, to a survival crisis. Though steel and mining sectors are covered under the Essential Commodities Act and the government ... ... ... March, 2020 IssueCOVID-19 is a declared pandemic that has swept all over the world, leaving thousands dead, lakhs infected and crores shuddering in fear across the globe. Industry analysis at this hour seems to be a far-fetched topic, though the industry is not ... ... ... February, 2020 IssueThe Union Budget 2020-21 seemingly gives indication of the government’s plans to be pro public as well as pro industry thorough tax restructuring and spending on infrastructure development, albeit it fails to steer clear of disappointing some quarters. While the tax ... ... ... January, 2020 IssueSteel prices are set to increase by about ₹2,000 a tonne next month on the back of strong demand and a rise in raw material prices. This would be the fourth consecutive month that steel prices have increased. Early this month, steel companies had raised prices ... ... ... December, 2019 IssueThe one-day conference, recently Organised in Kolkata by Steel & Metallurgy, evinced one key insight among many – India’s steel sector will have to play a major role in India’s trillion dollar economic dreams. But steel industry’s current state does little to endorse country’s ... ... ... November, 2019 IssueUnfavorable factors prevailing for the domestic steel sector put the feasibility of government’s grand steel vision at bay. Lack of momentum in the construction sector, lean patch of automotive sales, vagaries of raw material scenario have ushered in ... ... ... October, 2019 IssueIndia’s steel demand recorded 5% growth in the first half of this fiscal, compared to the 7.5% and 7.9% growth in FY-2019 and FY-2018 respectively. Demand scenario for steel in the domestic market has turned sluggish in recent months. While the domestic steel ... ... ... |
The COVID-19 pandemic and the lock-down, the countering measure as yet, have together brought
the Indian steel industry, like all other industries, to a survival crisis.Though steel and mining sectors are covered under the Essential Commodities Act and the government has urged the domestic steel producers to continue production, neither demand nor circumstances favour continuation of steel production at a pre-estimated level. The major steel producers are operating at low capacity utilization level which is estimated to drastically plunge to 30% or even below. For the secondary steel producers who contribute 50% of the country’s total steel production, this situation is even bleaker as most of the secondary steel producers are grappling with no-demand and no cash-flow. The estimation is that the capacity utilization level in the secondary steel sector will come down to a staggering 5% level. Constructions, automotive, white goods, the major steel consuming sectors, have almost shut down their operations as the demand in the respective sectors has plunged in the current scenario. Steel producers booked orders till March-end and are in the face of acute demand shortage from April onwards. The sudden fall in demand will also dampen a steady rise in the Indian steel prices which were on upsurge to bridge the gap with the high global selling price. The turnaround in steel demand is unlikely anytime soon as the consuming sectors will take some time to be rejuvenated. Now with the extended lock-down, there are some operational challenges as well such as raw materials scarcity and the possibility of blast furnace shutdown. While raw material supply is likely to get disrupted, major steel producers also fear contingency-specific shut down of blast furnace which entails a huge production downtime and cost. As a temporary relief in the domestic market, steel producers are seeking special credit lines for working capital, deferred payment for statutory and mining dues as well as reduction of railway freight along-side elimination of busy season surcharge, among several others business continuity measures. But the decision to continue production is still fraught with certainties over the improvement in steel demand. While the domestic market offers no respite soon, some export oriented policy can be implemented. China which has resumed steel mill operations is offering increased VAT rebate on exports from 10 per cent to 13 percent to boost steel production and steel export. The government should consider a higher export incentive which may offer some leverage to Indian steel producers to be competitive in the global markets.  |
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