JSW Steel’s Take On What’s In Store For India Steelmakers

[ad_1]

Demand Revival

China wants to set up over 500 gigawatts of renewable energy, which could result in large capital expenditure. To contain the overall energy costs, it has locked coal costs at cheaper than international level, he said. Post the Covid-19 disruptions, Rao expects the Chinese economy to stabilise.

Higher spending on defence from Europe could also stimulate demand and there could be a demand revival in India due to a rising share of capex, he said.

While certain brokerages have flagged a potential “slowdown” in construction and real estate due to high steel prices, Rao said the housing sector is not seeing a slowdown.

He considers India’s steel demand to be “reasonably okay”, except for the auto sector.

In FY22, India’s total steel consumption could be 105-106 million tonnes versus 94 MT in FY21, he said. Demand will remain “strong” in FY23.

Steel Prices To Rise

“Indian steel prices are mimicking the landed cost of Asian steel prices, which are for the retail market and lower than steel prices in the west,” said Rao.

He expects original equipment manufacturer price resets in April. The steel industry will work with end consumers like the auto sector to make them understand the need to hike prices due to higher costs of inputs, he said.

“The nature of the increase in cost of raw materials seems to point towards a large increase in steel prices in India as well.”

[ad_2]

Source link

https://businesstantra.in/folder