Economy

Steel demand to fall 65% in June quarter

Our Burea Mumbai | Updated on June 09, 2020 Published on June 09, 2020

The extended lockdown to contain the Covid pandemic has dealt a severe blow on the steel industry. With construction and manufacturing activity coming to a standstill and return to normalcy a distant proposition, the industry’s prospects have dimmed in line with the economy at large.

Steel manufacturers are now focussing on managing liquidity and cash flows in the near term, to tide over the 60-65 per cent fall in demand in the first quarter of this fiscal.

Steel manufacturers are hopeful that the incentives and extended credit cycle to MSME and downstream sales channel players will ensure their business continuity, according to Crisil Research survey.

While most steel companies expect demand to recover in the December quarter, the industry is gearing up for over 15 per cent fall in demand this fiscal.

The incremental government support towards facilitating exports, along with tax and logistics concessions will help to tide over this crisis, it said.

Lowered demand

Prospects of the construction sector, which accounts for over 65 per cent of steel demand in India, have dimmed considerably with the onset of the pandemic. Most of the infrastructure projects are expected to be deferred even after the lockdown is lifted due to labour shortage and lower infrastructure spending by the Central and State governments on account of lower tax collections and focus on social sectors.

No major support in demand is envisaged from other sectors, including capital goods, with weak industrial production and continued slowdown in automobiles sector due to cautious discretionary spending, it said.

Steel companies’ utilisation will to range between 50-60 per cent in this fiscal due to demand slowdown, logistic constraints and labour shortage.

Dearth of truckers and lack of labourers for loading/ unloading and movement of goods will impede transportation of raw material and finished goods.

Despite ports and mining activities being functional during the lockdown, 45 per cent of the steelmakers had seen disruptions in raw material supply, including iron ore and coking coal.

Published on June 09, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
Finance Ministry eyes decriminalisation of selected offences