India Steel Firms Hit by Massive Inventory Pileup

SEATTLE (Scrap Monster): The Indian steel companies are reportedly sitting on huge inventories of products on rock bottom demand, as industrial operations and other activities have come to a standstill due to 21-days lockdown period announced by the country’s government.

According to reports, steel companies in the country continue to operate, though at reduced output levels, as the industry is being categorized until “essential services”. However, the demand has dropped to almost zero, as industrial sector operations as well as infrastructure and construction activities have come to a grinding halt due to the ongoing lockdown. The produced steel thus continues to get added to the inventory, sources said.

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The steel industry participants noted that some amount of steel needs to be produced by blast furnaces. However, the mills are forced to store the steel at plant premises. The slump in steel orders had commenced in mid-February. Over the past one-month period, orders have almost dried up. The sector is likely to take at least two quarters to recover from the surplus inventory crisis, they said. The huge inventory in hand may also put pressure on domestic steel pricing.