JSW Steels Joint Managing Director & Group CFO Mr Seshagiri Rao in an interview with The Telegraph said that “I am confident about demand sustainability. Seeing the month-on-month improvement from April, I don’t accept it is just pent -up demand. From 1 million tonnes in April, it went up to 10.28 million tonnes in December, which is 19% higher YoY and the highest in a single month. Large infrastructures that were held up started, auto remained robust, retail, packaging, pipe also showed growth. We believe it will pick up further. Cost pressure is high, demand is strong and supply is increasing. So, I am not seeing further upside in steel prices, nor apprehending any crash.”
While answering to “There is much noise around steel prices already high, do you apprehend budget taking steps?” Mr Rao said “The noise has no substance. It depends on business practices. Some companies take fixed price contracts while some work on spot prices. So, when prices crashed, they enjoyed it. Now if it is high, they should not complain. I also don’t see demand weakening, leading to price correction.”
India consumed 68 million tonne steel in the first nine months, including 28 million tonne in the third quarter alone. Assuming the fourth quarter to be the same, India will consume 93 million tonne, a fall of 7% over the last fiscal, much lower than 17-18% initially apprehended.