Buoyant International Prices to Come to the Rescue of Steelmakers

SEATTLE (Scrap Monster): Ratings agency ICRA, in its latest outlook on domestic Indian steel sector, said that supportive international steel prices are expected to come to the rescue of domestic steelmakers. This in turn will help steelmakers to see through the second Covid-19 wave.

The domestic demand is expected to recover in the coming months, driven by lifting of travel restrictions and lockdowns. The improved vaccination coverage may lead to opening up of more industries. This trend will likely result in notable pick-up in capacity utilization levels at domestic steel mills, ICRA noted.

According to Jayanta Roy, Senior Vice-President & Group Head, Corporate Sector Ratings, ICRA, the rally in international prices helped the domestic steel industry to implement price hikes, even in the midst of economic turmoil on account of the devastating pandemic spread. Incidentally, local steel prices have jumped higher by almost one-fifth since the start of this fiscal.

The country remained net exporter of steel in April this year, with exports surging higher by almost 122% over the previous year. The exports stood strong in May, recording 30% growth from the prior month. The robust export activity boosted steel consumption levels significantly, ICRA said.

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