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In the midst of a storm of parliamentary elections and some planned maintenance shutdowns, India's finished steel production fell 9% month-over-month in April. The drag down was driven by a 6.2% decrease in crude steel production during the same time period under consideration.
India produced 11.2 MT of finished steel in April as opposed to 12.35 MT in March. In April, 12 MT of crude steel were produced, compared to 12.8 MT in March. However, both finished and crude steel production increased by 1.5% and 2.4% year on year. India's Steel Ministry reported that completed steel output in April 2023 was 11.05 MT, while crude steel production was 11.65 MT.
Domestic steel consumption dropped 10% odd m-o-m in April, reaching 11.075 MT from 12.259 MT in March 2024. On a y-o-y basis, consumption, however, grew over 9% from 10.12 MT in April 2023.
According to officials, there is a general slowdown in infra projects and other construction sector activities primarily because of elections. This demand disparity will play out in patches across the first three months of the fiscal year (April -June) but will see an uptick post-June if the government's 100-day program puts infra projects in full throttle. Apart from this, several primary mills had conducted maintenance on their hot strip mills (HSM) and cold rolling mills (CRM).
“Additionally, several TMT manufacturers had implemented production cuts, resulting in a reduction in finished steel production,” consultancy firm BigMint said in a report. Another consultancy firm, ICRA, said, that ahead of the Lok Sabha elections, government spending fuelled domestic steel demand at a brisk pace of about 16% between June and November (2023). But, the demand slowed down significantly in December and January to 6.5%.
However, internal projections by the Steel Ministry and industry participants peg an “at least in the 8 – 10% growth, if not more” after a “soft start to the year”. India’s steel exports continue to be hit, due to slower-than-expected demand pick-up in Europe and competition from China eating into other key markets, like the Middle East.
In April 2024, exports declined 40% year over year to reach 0.5 MT, compared to March, when they stood at 0.85 MT. Also, on a year over year basis, there was a 41% fall from 0.9 MT in April 2023, the Ministry data showed. Imports, on the other hand, saw a 2.5% increase m-o-m to 0.6 MT in April. In March 2024, it stood at 0.57 MT. However, imports rose over 27% y-o-y, from 0.46 MT in April 2023. India was a net importer of steel.
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