Steel output, consumption hit 2-year high in December

In what could be a sign of recovery, the production and consumption of finished steel have shown a big jump during December 2020.

After witnessing a decline for the first five months of the current fiscal, the steel consumption returned to the positive zone from September onwards and a double-digit growth had been recorded for two consecutive months in November and December.

In December, the production of steel stood at 9.32 million tonnes and the consumption at 9.68 million tonnes, a growth of 1.08% and 11.91% respectively over the same month last year. Also, the consumption and production during December were highest for any month in the last two years.

Between April and June 2020, both the production and consumption had declined substantially due to the Covid-induced lockdowns as compared to the corresponding period last year, according to data released by the ministry of steel.

However, the production and consumption have shown sharp recovery subsequently and a substantial increase in recent months. During the first nine months of the current fiscal ended December, the production of steel stood at 66.54 million tonnes as compared to 77.73 million tonnes in the corresponding period last year, showing a decline of 14.4%.

The consumption of steel during the same period stood at 64.62 million tonnes compared to 76.23 million tonnes in the corresponding period last year, a year-on-year decline of 15.2%.

“There has been a countrywide turnaround in the overall economic activities after the short pause set in during the pandemic. In sectors like infrastructure, construction, manufacturing and automobile, there has been a relatively rapid recovery. As these sectors are major steel consumers, the recovery in them has helped the up-rise in demand in the domestic steel sector,” Soma Mondal, Chairman, Steel Authority of India Limited (SAIL), said adding “The worst is behind us.”

The Budget allocation of Rs 1,07,100 crore for Railways, Rs 2.87 lakh crore outlay for Jal Jeevan Mission, construction of roads under Bharatmala Pariyojana project, Swachh Bharat Mission 2.0, and Scheme for Mega Textile Parks are expected to lead to an increased demand for steel in the country.

“All the sectors have opened up and labour availability has increased resulting in demand for steel across sectors. This is a good sign and the recovery is fast on track. We expect double-digit growth in the production and consumption of steel during the next financial year,” Vinod Nowal, deputy managing director, JSW Steel told DH.

The Vision for Atmanirbhar Bharat and the Production Linked Incentive (PLI) Scheme will also help attract capital investments and thereby enhance demand and production of steel in the country, the ministry of steel said.