The ongoing Russia-Ukraine crisis has impacted the availability and prices of key commodities such as steel, CareEdge has said in its latest report.
"Russia is the 2nd largest steel exporter (followed by China) and 5th largest steel producer in the world. As per the World Steel Association, Russia had produced 76 million tonnes (MT) in calendar year (CY) 2021 and had exported 32 MT of steel in CY 2020 followed by 51 MT of steel exported from China. During CY20, Ukraine too had exported 15 MT of steel to the world and had produced 21 MT. (Refer Table 1). As a result, the disruption or exclusion of steel exports from these two nations to an extent will likely have an impact on international supply situation and thus leading to increased prices," CareEdge has noted.
The steel consumption surpassed the pre Covid-19 level of 86 MT during April-January 2020 and stood at 87 metric tonnes during April-January. This is on account of an estimated increase in demand from sectors like construction, automobiles etc.
The disruption in global steel supply is expected to benefit the Indian steel industry, the agency has said.
"Russia being the major exporter of steel to European Union (EU), the restrictions on the export from Russia to EU will create opportunity for India. In addition, the demand for Indian steel industry will be supported by increased government spending on infrastructure and a gradual economic recovery. The Union Budget 2022-23 has seen an increase of 36% Y-o-Y in allocation of capex at Rs. 7.5 lakh crore. The budget has infrastructure push towards seven engines (roads, railways, airports, ports, mass transport, waterways and logistic infra). The allocation for various schemes like Pradhan Mantri Awas Yojana (PMAY) scheme, Jal Jeevan Mission will have a positive impact on specialty steel and long steel players," CareEdge noted.