India's finished steel consumption in April 2021 stood at 6.78 million tonnes, down 23% month-on-month, but still 8 times higher, year-on-year, India Ratings (Ind-Ra) report shows.
"Domestic steel consumption is likely to be low over 1QFY22 quarter on quarter due to the onset of the second covid wave, but not at the low levels witnessed over 1QFY21 when there was a complete shutdown of activities. The second wave is likely to impact auto and consumer durable demand and partially delay construction and infrastructure activities," the rating agency has said.
However, Ind-Ra opines the strong international prices and export demand would enable steel producers to increase export levels, although high freight and shipping costs and container availability could be the areas of concern.
According to India-Ratings India's crude steel output in April 2021 was at 8.3 million tonnes (MnT), 152% year-on-year (yoy) higher, due to the complete COVID19 lockdown in the previous year. However, the crude steel output reduced 17% month on month (mom) in April 2021, due to the second covid wave. The domestic steel output has been driven by increased exports and higher capacity utilisation levels than last year. Accordingly, the domestic steel output was 27% yoy higher at 30.1MnT over January-April 2021.
Production stays higher
The crude steel production of 64 countries was 23% yoy higher at 169.5MnT in April 2021, driven by the opening up of economies as the pace of vaccinating citizens against COVID-19 increased globally, higher government investments and strong steel prices. China's crude steel output was 13% yoy higher at 97.9MnT in April 2021 on account of improved consumer demand. The higher output was despite government's efforts to reduce annual output and curb carbon emissions. China's industrial production grew 9.8% yoy in April 2021. Also, the higher profits on account of the high realisation levels resulted in increased export volumes. Over January-April 2021, China's crude steel output was up 16% yoy at 374.6 million tonnes.