NEW DELHI (Reuters) - India’s domestic steel consumption during April-August dropped to its lowest in at least six years, government data analysed by Reuters showed, underlining the economic slowdown and slump in infrastructure spending.
Steel consumption, in the first five months of the fiscal year, was at 27.4 million tonnes, a 35% fall over last year, data showed. The reading was also the lowest since data was collated in the current form beginning with the fiscal year April 2014-March 2015.
Per capita steel consumption in the country is among the lowest globally, around 66 kilograms, compared to the world average of around 212 kilograms.
Steel, which forms 18% weight of the country’s eight core industries index that includes coal, crude oil and electricity, is largely used by construction and infrastructure projects.
Finished steel production also fell over 30% during April-August to 30 million tonnes, data showed.
Steel producers, however, continued to ride out the domestic slump by focussing on exports, with China emerging as top buyer, shipping in a record 1.7 million tonnes during April-August. India also was net exporter of steel in April-August.
China has displaced India’s traditional export markets this year, despite a serious military standoff, as it continues to ramp up infrastructure spending after the coronavirus pandemic.
India mainly exported hot-rolled coils to China, a flat steel product which is used to make pipes, automobile parts, engineering and military equipment, among others.
“The domestic economic environment remained subdued,” the Joint Plant Committee, set up by the federal steel ministry, noted in its August report.
This year, the Indian economy is expected to suffer its first full-year contraction since 1979 because of a severe lockdown imposed early on to control the virus.
Reporting by Neha Arora; Editing by Sanjeev Miglani and Shailesh Kuber
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