Indian rating agency ICRA has revised its outlook for the Indian steel industry to stable from negative on the back of improving demand and prices, a statement from the agency said on Tuesday, December 15.
“The domestic steel sector has witnessed a strong revival in the second quarter of 2020-21. This is a result of a combination of factors like strong retail demand emanating from the thriving rural economy, and green-shoots of recovery in white goods and automobile industries,” the agency statement said.
“The momentum has strengthened further in the December quarter and cumulative domestic demand in October-November has already surpassed pre-Covid 19 levels,” the statement said.
“We are gradually seeing a more broad-based pick-up in economic activity with every passing quarter, which makes us believe that recovery in domestic steel demand would sustain in the near term at least,” it said.
Consequently, ICRA is revising its 2020-21 steel demand forecast to a contraction of 12 percent, compared to a 23 percent contraction forecast in April this year, the statement said.
As regards production, ICRA said that the share of the top six Indian steel producers in total Indian crude steel production, which had remained at 55 percent historically, has also risen to 65 percent in recent months.