Jindal Steel and Power Ltd (JSPL), a leading manufacturer of flat and long steel products in the country, today said it was hoping for normal consumption growth in the steel sector during the coming financial year.
“We are quite sanguine that the consumption of steel will grow by around 5 per cent in the next year, at par with the expected GDP growth of India,” said V K Mehta, Director (sales and marketing) with JSPL at the regional launching ceremony of its flagship rebar brand Panther here.
Finished steel demand, a key barometer of economic health of any country, grew by only 0.5 per cent in the April-January period in India.
“This is an abnormal year as far as steel industry is concerned. Because normally growth in steel sector is at par with GDP growth, while this year it was much lower. We hope normalcy will be restored in the next year,” said Mehta.
Steel producers across the country felt margin pressure as supply was more than demand amid tight raw material prices such as iron ore, coal and semi-finished long products such as billets. In 2013 calendar year, India produced 81.2 million tonne crude steel, about 5 per cent higher than previous comparable period, data from World Steel Association showed.
Last month, prices of reinforced bars (rebars) used in house and building constructions slipped by around one percent at major cities to Rs 33,500 to Rs 37,000 per tonne on limited demand. “Earlier there was mismatch between demand and supply which was suppressing the prices. At this point of time, though I cannot say prices would go up, we expect demand growth in the next fiscal,” he said, hinting that projected rise in demand would clear huge pile of inventories steel producers have across the country.
As per trade estimates, out of 27 million tonne rebar market in the country, large players like JSW, JSPL, Tata Steel and Steel Authority of India Ltd (SAIL) supply only 7 million tonne while rest of the demand is met by other small rebar producers. The prices are expected to move in a tight range in the next fiscal as well due to capacity addition by manufacturers. JSPL and SAIL have already announced to increase their steel making capacities in coming years including production of long products.
Source:- business-standard.com
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