The coronavirus pandemic has brought down the steel industry, but it quickly returned to normal thanks to increased domestic demand.
However, the first months were devoted to strategizing and coping with the falling demand during the months of isolation. “We found the right places and the right products to export to stay in the game. So we exported pellets and steel at this time, because in the first months, the demand completely dropped. But whatever we did, it paid off, ”AMNS India CEO Dilip Ommen said Thursday.
“By mid-May, we were 100% utilized at all of our assets,” Ommen said in a virtual conclave of the Bengal Chamber of Commerce.
Pankaj Mulhan, CEO of Vedanta Electrosteel, said he hoped that capacity utilization would be maintained. “In terms of the product portfolio, we are back to the pre-Covid period.”
When the lockdown occurred, Vedanta Elektrostal adjusted its product portfolio in line with demand levels and customer preferences.
In the first months of the lockdown, the industry was heavily dependent on exports as domestic industries were largely closed. Since then, the recovery has been dramatic.
Soma Mondal, Commercial Director, Steel Authority of India Limited (SAIL), said: “There has been a resumption of business. We are seeing a V-shaped recovery in steel. ” However, the spike in demand has led to a sharp jump in prices that have already exceeded the peak levels of 2018.
When asked about price increases, Mondal explained that domestic prices are influenced not only by the forces of supply and demand, but also by international prices. “The demand in the international market is growing. Iron ore prices are around $ 150 per ton, which affects world prices. Indian prices cannot be insulated from this, ”she said.
Mondal also pointed out that due to increased demand in the domestic market, steel companies have significantly reduced their exports.
The industry expects strong demand to continue over the next few quarters. SAIL Chairman Anil Chaudhary said: “Most companies posted losses in the first quarter; SAIL posted a loss in the first quarter but made a profit in the second quarter. The third quarter will also be good given good market conditions. ”
“This year will be better than last fiscal year for most players in the steel industry,” he added.
Prices for long products, which are mainly used by infrastructure and construction, started to rise with increased activity.
Steel industry sentiment regarding demand growth in India is optimistic. Mondal said India has real growth prospects. Per capita steel consumption in India is low, leaving room for growth. In India, it is about 78 kg compared to the world average of 225 kg.
“We are optimistic about the future of the steel industry. While we are expanding our pellet production capacity to 20 million tonnes, we want to double production at Khazira in the first phase, and then we will look for opportunities for old and new deposits, ”Ommen said.