Stimulating infrastructure development by the new government could help boost steel consumption in the second half of 2019-20 and overcome inertia in demand, said JSW Steel's Commerce and Marketing Director Jayant Acharya. Steel consumption remains seasonally low during June-September due to monsoon rains.
Total steel consumption in India rose 6.5% in April-May from the previous year to 16.33 million tonnes. In 2018-19, steel consumption increased by 7.5%.
Over the past several weeks, Indian steel mills have been battling weak domestic demand, keeping steel prices low.
Domestic HRC prices have dropped by Rs 2,000 ($ 28 /t) over the past two months. Argus estimates the weekly domestic Indian price for HRC 3mm and above was Rs 21,250 /t ($ 599 /t) on June 21.
According to Acharya, large volumes of cheap steel continue to flow to India, putting pressure on domestic prices.
India's steel imports rose 4.6% from a year earlier in 2018-19 to 7.83 million tonnes, while exports fell 34% to 6.36 million tonnes.
Protectionist measures in the US, EU and Southeast Asia have hampered the export of large Indian steel mills such as JSW Steel. World prices for steel products are also much lower than domestic prices in India, making them uncompetitive in world markets.
