INSUBCONTINENT EXCLUSIVE:
thrust on infrastructure, affordable housing, power transmission and Railways
This prompted agency to give a stable outlook for steel industry, in its year end assessment of sector
However, despite robust demand, domestic steel production growth is likely to remain low at about 2.5-3% in FY2019 due to increased threat
from cheaper imports, combined with a considerable de-growth in steel exports due to rising global trade tensions.
ICRA expects domestic
steelmakers to increase capacity further by about 16 million tonne over FY2019 - FY2021
Additionally, with investments towards a ramp-up and debottlenecking of stressed assets taken over recently, this would lead to an industry
capex estimate of Rs 750-800 billion between FY2019 and FY2021
The industry's capacity utilisation level is expected to remain at a healthy 82-83% between FY2019 and FY2021, supported by a favourable
domestic demand and low greenfield capacities coming up in medium term.
Export volumes are likely to stabilise however in FY2020, albeit at
a lower level, with domestic steel production slated to grow at a higher rate of around 5.5-6%, supported by healthy domestic demand, report
added.
Also, a flat demand growth forecast for China in CY2019 would keep average international prices and thus domestic prices lower in
that steep reduction in international steel prices recently would make domestic steel imports cheaper in coming weeks, when these shipments
start hitting Indian shore
560/tonne in first week of October 2018 to US$ 476/tonne in first week of December 2018.
Despite an expected reduction in margins in H2
improved performance in first half.
