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India's JSW Steel sees firm demand in January-March

25 Jan 2022 11:40 GMT
India's JSW Steel sees firm demand in January-March

Mumbai, 25 January (Argus) — Robust consumption from the automotive, infrastructure and construction sectors will support India's domestic steel demand during the January-March quarter, with exports to also remain firm, Indian private-sector producer JSW Steel said.

Domestic steel consumption was weaker in October-December — the third quarter of India's April 2021-March 2022 fiscal year — on the back of higher prices, festival holidays and unseasonal rains in some parts of the country. The fourth quarter started with a third wave of the Covid-19 pandemic, but it is expected to have little impact on manufacturing activity.

"The outlook for quarter four from automotive is very good; general infrastructure pick-up and construction activity is also quite positive," JSW's commercial and marketing director Jayant Acharya said. "We have seen some tender announcements and some execution of the projects which are now taking place for oil, gas and water pipelines, which will be again positive during the quarter and beyond into the next quarter as well."

The steelmaker sees its consolidated exports making up 20-25pc of its total sales in the January-March quarter. "The enquiries are far better post the holiday season, people have come into the market to buy. Therefore in the last 2-3 weeks the export bookings have seen a good movement upwards," Acharya said.

India's finished steel exports declined to 721,500t in November, the lowest level so far in the 2021-22 fiscal year as falling international steel prices made Indian offers uncompetitive.

Chinese production is likely to be scaled back over the next few months because of the Beijing Winter Olympics and the winter season, JSW said. Output cuts in certain regions to control carbon emissions will lower exports, although recent steps by Beijing to inject stimulus and support its real estate market will boost its economy.

China's crude steel output dropped by 3pc from 2020 from 2020 to 1.03bn t last year, as the country has been steadily lowering its steel production in an effort to cut carbon emissions.