Realty, automobile sectors put steel industry back on recovery path

Realty, automobile sectors put steel industry back on recovery path
Hindu Business Line, January 6, 2010, Page 1

Our Bureau, Mumbai

Strong demand from the automobile and realty sectors appears to have put the steel industry on the revival path.

Major manufacturers such as Tata Steel and JSW Steel have reported a healthy year-on-year growth in production for December.

Tata Steel achieved a 21 per cent rise in crude steel production at 600,204 tonnes, against the low base of 494,000 tonnes in December 2008.

“Tata Steel plant now operates at the rate of 7.2 mtpa against the rated capacity of 6.8 mtpa,” the company said on Tuesday. It also registered its best saleable steel production of 592,487 tonnes.

The December demand was largely driven by the automobile sector, said a steel analyst.

Many of the steel companies also passed on the increase in raw material costs to end-consumers on the back of encouraging demand, he said.

Tata Steel said the sale of flat products used in automobiles and consumer durables increased 90 per cent, while that of long products, primarily used in the real estate sector, rose 56 per cent.

During the quarter-ended December, the company's sales jumped 49 per cent to 1.60 million tonnes (1.07 mt). Crude steel output was up 15 per cent to 1.72 mt (1.50 mt) and saleable steel production rose 37 per cent to 1.69 mt (1.23 mt).

JSW Steel's crude steel production in December more than doubled to 563,000 tonnes (229,000 tonnes). Flat product production was up 56 per cent to 330,000 tonnes (212,000 tonnes), while long products rose over three times to 94,000 tonnes (26,000 tonnes).
During the December quarter, JSW Steel's crude steel output jumped 88 per cent to 1.47 mt (782,000 tonnes). Flat and long product output rose to 941,000 tonnes (622,000 tonnes) and 237,000 tonnes (79,000 tonnes).

The stock of Tata Steel rose 2 per cent to close at Rs 649 on the bourses, while JSW Steel rose 11 per cent, closing at Rs 1,134.