Changes in the Indian Steel Industry Post – Covid -19 Outbreaks and Lockdown
Since the first steel manufacturing was initiated in India at TISCO in 1907, India has covered a long distance very successfully. Eventually, it has become the second-largest crude steel producer globally with a production of 111 million tonnes. But the pandemic has hit every industry very hard and steel is no different. But post lockdown the Indian steel market is displaying signs of reclamation. But 12mm TMT bar price suggests that the domestic demand for steel could continue to be subdued until the October-December quarter but exports have increased considerably.
Sudden alterations in the Indian Steel industry post-Covid -19 outbreak and lockdown respectively –
- India was going for expansion till March 2020 with a PMI over 50. Suddenly, COVID-19 put India to a grinding halt. India went into a lockdown. The supply-side constrictions owing to inter-state border closures, labour unavailability, and office shutdowns put the economic activities to an absolute standstill in April. This resulted in extremely low levels of demand. The frail domestic demand along with huge inventory build-up and supply chain log jams affected the prices negatively and delayed swift production ramp- ups.
- Covid-19 started in China. So, Wuhan the steel industry in China is hit like never before. A massive inventory of already produced steel exists in China right now. This is pushing the international price down in the steel industry. Of course, this is helping the Indian Steel Industry. In construction, manufacturing, and other sector international businesses are searching for viable options and the Indian Steel Industry is well-equipped to satisfy their search.
- Again, the export of finished Steel has seen an enormous increase during these Covid times. This is the result of a significant increase in exports to China, Spain, and Italy. India exported 20.3% of the total finished Steel produced in July 2020.
- Again, plummeting domestic demand in the middle of decelerating global economic growth has forced cross imposition of duties by major Steel manufacturing countries. India has also levied duties to protect its domestic Steel industry.
- In spite of the hindrance due to Covid-19 and the subsequent lockdown, there is a ray of hope also. The key sectors that command a substantial percentage of the Steel demand like the construction and infrastructure sector are confident of fast growth in the coming days, because of the countless Government infrastructure projects like- Bharatmala, Sagarmala, Atal Mission Manufacturing Zone, Smart cities, and many more.
The superior-quality steel products like 12mm TMT bar by MS Life Steel and their price are always on the rise and because of this and the healthy demand, India experienced growth each and every year in the past. The recent increase in demand shows that India is going to be the world leader in the steel sector in near future. The exports of steel products are going to escalate and that is where steel is going to again become the most important goods to contribute to GDP.