India's steel demand seen slowing in 2019-20

India's steel demand is forecast by some domestic analysts to grow at a slower pace of 5-6pc in the 2019-20 fiscal year ending 31 March compared with 7.5pc growth in 2018-19.

Mumbai-based research firm Icra Research, a Moody's Investors group company, projected steel demand to rise by 5pc from a year earlier in 2019-20, while Mumbai-based equities brokerage CGS CIMB Securities projected an increase of 6pc.

India's steel demand growth was 3.9pc during April-October this year at 59.05mn t.

"Moderation in steel demand is largely attributable to a slowdown in demand from the automobile and construction sectors," said Icra.

India's monthly steel consumption during September fell by 3pc from the previous year to 8.08 mn t. October increased marginally by 2pc to 8.55mn t.

An increase in steel demand will largely depend on the scale and pace of infrastructure and construction sector spending by the government for the remainder of 2019-20, Icra added.

Demand for long steel products could increase from November onwards because of post-monsoon construction and infrastructure activity, said Mumbai-based India Ratings & Research, a Fitch group company. But overall steel demand growth for the second half of 2019-20 may still remain lower on a year-on-year basis, it said.

By Charlotte Rao

source: Argus Media