Rising demand and strong prices ! What else should the Indian iron & steel sector ask for ? Indeed last few months presented more than one surprises for Indian steel industry. The demand started rising somewhere during July-August, the prices started firming around the same period and now in the month of March 2021, the sentiment in the industry seems completely positive. So much so that the government had to lower the import duty on finished steel and also on the scrap and ore in order to put some pressure on prices. These proposals in the recently tabled union budget rightly aimed at giving some relief to the steel using sector such as automobile, infra and construction.
Yes, we have reached the pre-covid production levels and that is really remarkable but is not the peak performance. If one recalls, the Indian economy was not doing well since 2017. The GDP growth rate started falling gradually. Many parameters along with the auto sales figures went southwards and the experts were busy debating whether this can be technically termed as ‘recession’. It was also argued that in today’s connected world, no country can progress in isolation. India also can not progress when most of the countries in the world (of course except China) are undergoing recessionary trends. Quite valid logic ! So my dear friends, hold your crackers and postpone your celebrations. Let us first understand that we have only climbed till the half way mark. A similar situation in Jan 2020 was termed as ‘recession’, so what is the big deal ?
Friends, the most noteworthy fact about today’s situation is that unlike in Jan 2020, its direction is northwards. We have bettered our situation and position in the last two quarters or so. Stabilized the production, strengthened the demand, rebuilt the logistic channels and imparted the required confidence to the user industry. Let me tell you this is a huge contribution not only to the growth of steel industry but also to the national economy which was struggling to come back on the track at that point of time.
So what next ? I feel still a long way to go. If India has to become a 5 trillion economy and if its annual steel making capacity has to reach to 300 mt by 2030-31, our economy has to grow by around 7.5 to 8 % annually. The ‘Indian growth story’ can emerge only out of ‘Indian steel growth story’. Lets keep going, as said in some old poem ‘Miles to go before I sleep’ !
D A Chandekar