Brickwork Ratings Foresee 12% Dip in Steel Demand

Meantime, the domestic market started showing some signs of demand recovery in Q2 FY21.

SEATTLE (Scrap Monster): The latest report published by Brickwork Ratings says that steel demand in India is likely to fall by record 10-12% during the current year, hit by Covid-19 pandemic and subsequent lockdowns. The economic recession has impacted the already weak consumption pattern for steel in the country, the report noted.

In Q1 FY21, many big steel manufacturers were forced to operate at reduced capacities, owing to scarcity of raw materials, lower demand situation and logistics-related issues. Also, many small and medium-sized companies shut operations during the quarter. Consequently, the finished steel production witnessed 49% decline, when compared with the same quarter in FY20. Also, the country recorded 53% dip in steel consumption, said the Brickworks Ratings report.

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Meantime, the domestic market started showing some signs of demand recovery in Q2 FY21. This is evident from the fact that finished steel production recorded only 2% decline over the previous year. The dip in steel consumption during the quarter slowed down to 10%. Also, H1 FY21 posted notable surge in steel export volumes, especially to China.

The agency predicts that the steel capacity utilization levels are likely to fall to around 62% in FY21, as compared with 77% in FY20.

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