STEEL IS STAINLESS AGAIN
The Economic Times, March 27, 2009, Page 1
Big steel cos operating at full capacity after long lull
Pramugdha Mamgain & Subhash Narayan, NEW DELHI
INDIA’S largest steelmakers are operating at full capacity after a five-month lull that saw them cutting production, raising hopes of an imminent economic recovery.
SAIL, Tata Steel, JSW and Essar have all resumed normal production, a marked contrast from last October when most steel companies were forced to cut output by up to 40% due to a steep fall in demand.
The steel sector’s revival can be linked to an improvement in the economic scene since January, largely due to the fiscal and monetary moves taken by the Centre and RBI to spur demand. Demand in the rural sector has also risen in the last two months.
“Since steel has a high co-relation with the GDP, a pickup in production is a clear indication of an increase in manufacturing and industrial growth,” said HDFC Bank chief economist Abheek Barua.
Local steel prices fell by over 35% from the July 2008 peak of Rs 50,000/tonne to Rs 28,000-30,000/tonne earlier this month. Prices have more or less stabilised since then. Incidentally, global steel prices have seen a steeper fall to around $450-500/tonne from last year’s peak of $1,400. “While prices continue to fall marginally in the global market due to a dip in raw material prices, steel prices have almost stabilised in the domestic market on the back of a demand revival ,” said AS Firoz, a steel and natural resources consultant.
The Economic Times, March 27, 2009, Page 1
Big steel cos operating at full capacity after long lull
Pramugdha Mamgain & Subhash Narayan, NEW DELHI
INDIA’S largest steelmakers are operating at full capacity after a five-month lull that saw them cutting production, raising hopes of an imminent economic recovery.
SAIL, Tata Steel, JSW and Essar have all resumed normal production, a marked contrast from last October when most steel companies were forced to cut output by up to 40% due to a steep fall in demand.
The steel sector’s revival can be linked to an improvement in the economic scene since January, largely due to the fiscal and monetary moves taken by the Centre and RBI to spur demand. Demand in the rural sector has also risen in the last two months.
“Since steel has a high co-relation with the GDP, a pickup in production is a clear indication of an increase in manufacturing and industrial growth,” said HDFC Bank chief economist Abheek Barua.
Local steel prices fell by over 35% from the July 2008 peak of Rs 50,000/tonne to Rs 28,000-30,000/tonne earlier this month. Prices have more or less stabilised since then. Incidentally, global steel prices have seen a steeper fall to around $450-500/tonne from last year’s peak of $1,400. “While prices continue to fall marginally in the global market due to a dip in raw material prices, steel prices have almost stabilised in the domestic market on the back of a demand revival ,” said AS Firoz, a steel and natural resources consultant.
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