The demand for rolled metal is expected to recover in the coming months thanks to the lifting of travel restrictions and quarantines.
In its latest survey of the Indian steel sector, ICRA said favorable international steel prices are expected to come to the rescue of domestic steel producers. This, in turn, will help metallurgists overcome the second wave of Covid-19.
Domestic demand is expected to recover in the coming months thanks to the lifting of travel restrictions and quarantines. Improving vaccination coverage could lead to the opening up of more industries. This trend is likely to lead to a noticeable increase in capacity utilization at domestic steel mills, ICRA notes.
According to Jayantha Roy, senior vice president and head of the corporate sector ratings group at ICRA, the rise in global prices has helped the domestic steel industry to raise prices even in the midst of economic turmoil due to the devastating spread of the pandemic. Incidentally, local steel prices have jumped nearly one-fifth since the start of this fiscal year.
In April this year, the country remained a net exporter of steel, with exports growing by almost 122% over the previous year. In May, exports remained stable, showing an increase of 30% over the previous month. According to ICRA, strong export activity has significantly increased the level of steel consumption.