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India records 46.9% increase in steel production in May, beats expectations

Steel production rises

As economic activities picked up in the country with the unlock process underway, India registered a 46.9 per cent year-on-year increase in its crude steel production with 9.2 million tonnes (MT) in May. This is noteworthy as many analysts had feared a drop in production in May when many steel majors redirected liquid oxygen to hospitals in their efforts to fight the brutal Covid 19 wave that swept the country. In the corresponding month last year, India produced 6.5 MT of steel.

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A report published by an independent media organisation Argus, steel capacity utilisation in India could rise with the lifting of lockdowns and a rise in Covid-19 recovery rates which in turn are expected to push demand for the metal and operations at the production units.

“Capacity utilisation levels are expected to rise above 80pc in the April 2021-March 2022 fiscal year from about 72 per cent the year before with a number of states set to lift lockdown restrictions in the first week of July,” the report said quoting un-named analyst.

Also read: Global economic recovery positive for India: EY

With a 6.6 per cent year-on-year growth in output at 99.5 MT in May, China remained the global leader in the production of steel, news agency PTI said. China’s total production of steel in the corresponding month last year stood at 92.3 MT.

According to the news agency, 'the production of the 64 countries reporting to the World Steel Association (worldsteel) was 174.4 MT in May 2021, a 16.5 per cent increase compared to May 2020,' as per global industry body.

Meanwhile, India’s exports of finished steel increased by 15 per cent in May compared to 11 per cent registered in the previous month, government data revealed.

Also read: India’s June steel exports may fall as local sales rise

Experts however said that exports in June would be lower as domestic demand increases with the unlock process. “Construction work has picked up once again as the rate of infection falls, this is a positive sign as there were apprehensions that production will drop as many steel producers had directed liquid oxygen supplies to hospitals in May when Covid 19 cases had surged and there was shortage of oxygen,” an industry body analyst said.

Argus noted that exports from India had risen during April-May period as domestic demand slowed as most states went into lockdowns to contain the spread of Covid 19. Exports to Italy, Turkey, Spain, Hong Kong and Nepal have particularly risen sharply in recent months, Argus in an analysis pointed out.