Iron & steel industry continues to have challenging times in most parts on a global level. Eurozone continues to be stagnated, Middle East region showed a little forward movement when oil prices started moving up but now with oil prices being steady at a lower level than expected, the industry and the economy in ME region seems to be halted. South East Asian countries are again witnessing a tough time. Their economies have great influence of their Chinese counterpart and now they are exposed to a dynamically changing policy situation. As we all know, now for last so many years, the key player in iron & steel sector is China. The global steel industry, material availability, pricing and other parameters are being greatly influenced (if not decided) by Chinese industry. Of late, the Chinese industry is in the process of shutting the technologically outdated plants and in the process, reduce the steel making capacity to a manageable level. Today, even their export volume is more than number two steel produces in the world. I feel if the Chinese steel capacity reduces substantially, their exports will automatically reduce. This will take away a big chunk from international trade and obviously will help to subside the pressure on regional iron & steel industries.
Indian iron & steel sector has also gone through a very challenging time for the last few years. They have seen shortage of vital inputs like iron ore, coal etc, closure of mining activity by the supreme court orders, continues demand stagnation etc. But now the situation is changing, though slowly but definitely. The demand seems to have started climbing up. This may be due to forward movement of mega infra projects in the country. Also, better road condition is facilitating auto industry growth which in turn helps the steel demand to grow. Fortunately this year monsoon is quite satisfactory in most of the regions in the country. This will have a direct, positive and immediate impact on agro equipments stector, tractor sale etc. Further, good crops will increase the purchasing power of the common man whereby helping the economic wheel to move faster. This will obviously help the steel sector to grow.