Steel Industry in India to Post Record 4Q Sales Growth

Strong domestic demand, along with healthy exports, contributed to the consistent growth in production and sales of the steel industry in the fourth quarter of 2020-2021, analysts said.

Steel companies are expected to increase their revenues by 20% qoq and 45-50% qoq, driven by higher sales and higher demand, mainly driven by a recovery in state capital expenditures, automotive, home appliances and real estate. ... building.

“Steel companies are expected to show a whopping 45-50% YoY revenue growth driven by higher sales (up 27% YoY) and healthy demand in the fourth fiscal quarter of 2021 versus a low base last year (sales and production suffered in the last two weeks of March 2020 due to quarantine), ”- says the April 8 Crisil Research report.

The five largest steel producers - Tata Steel, JSW Steel, Steel Authority of India Ltd (SAIL), Jindal Steel & Power Ltd and AM /NS India (formerly Essar Steel) - account for about 55% of India's installed capacity.

Domestic flat steel prices are estimated to have risen 32% in the fourth quarter over the same period last year and are expected to remain strong in the coming months.

“Global steel prices are at an unprecedented high due to the surge in iron ore prices, as well as strong growth in steel demand from China, India, the United States, Europe and other emerging markets, as well as global markets. Markets are recovering from a year-long downturn with a resumption of business activity and vaccinations, ”said Care Ratings March 30 report.

HRC prices are expected to rise by at least £ 3,500-4,000 per tonne in April 2021. The £ 4,000 per tonne increase will push domestic hot rolled steel prices to £ 59–60,000 per tonne, the highest level since 2008.

Robust global steel and iron ore prices, as well as strong demand from China, the United States and Europe, drive global steel prices and prompted domestic steel producers to raise prices after the second half of fiscal 21.

However, while the rise in steel prices is bringing relief to domestic steel companies, it has frightened end-user sectors that fear soaring raw material prices.

In addition, the rise in steel prices also raises concerns about inflation in domestic markets, as rising commodity prices across various sectors have a cascading effect on consumer spending.

The sectors most affected are automobiles and infrastructure. Construction and real estate account for 55-60% of total steel consumption, followed by a