Domestic steel production and consumption continued to improve in October 2020 both sequentially as well as on y-o-y basis, CARE Ratings has stated in its latest report.
In October 2020, India's crude steel production stood at 9 million tonnes (mt), up 0.2% as compared with the corresponding month in 2019 and 5.7% higher as compared to September 2020, the ratings agency has stated.
"Production of finished steel also grew by 1.1% y-o-y to 8.4 mt and 3.7% compared to September 2020. The y-o-y fall in consumption of finished steel contracted to -2% in October 2020 from - 4.9% in September 2019. Both production and consumption of steel have consistently been improving since April 2020.
The y-o-y contraction in finished steel consumption have been reducing since the last six months, from (85.8%) in April 2020 to (10%) in July, (4.9%) in September 2020 and just (2.1%) in October 2020. Production of finished steel which had tanked 82.1% y-o-y in April returned to growth in August, albeit marginally by 0.1%, it further improved and rose by 1.1% y-o-y in October 2020," CARE Ratings has stated.
According to the ratings agency demand for steel from the infrastructure activities, pipe manufacturing, automobiles, and consumer durables sector ahead of the festive season has led to increased steel consumption and higher restocking demand.
"Capacity utilisation levels of crude steel improved with the unlocking of the economy and recovery in demand initially on the back of higher international demand before domestic demand began to pick-up which eventually moderated export. After hitting bottom in April 2020 at 27%, capacity utilisation rate of crude steel returned to year-ago level of 76% in October 2020," CARE has stated.