JPC: Steel Output and Demand Slumped in India

The steel output and demand slumped in India during the month of April this year, as the steel consuming sectors came to a virtual standstill on account of extended nationwide lockdowns in the country, said the latest report published by the Joint Plant Committee (JPC), under the Ministry of Steel.

The country’s steel demand has contracted by 91% in April over the previous year. The fall in demand was mainly due to muted demand from automobile, real estate and sectors, which together account for nearly 80% of the country’s total steel demand. These sectors are unlikely to witness surge in demand in the near-term, as sector operations are likely to be impacted by labour shortages and supply chain constraints.

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The provisional figures published by JPC say that domestic steel production in the country recorded nearly 70% year-on-year decline in April 2020. The crude steel production totalled just under 3 million tonnes during the month. Although steel industry was allowed to operate during the lockdown period, the mills were forced to scale down their production in response to absence of demand from end-user industries.

Care Ratings expects steel demand to remain significantly lower during the June and September quarters this year. Further, resumption of production by mills will result in substantial increase in mills steel inventory levels.