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Debabrata Das

New Delhi, Nov. 3 Good news is just around the corner for domestic steel producers as demand is set to pick up. With construction in the real-estate sector and Government infrastructure projects set to pick up in the coming months, demand for long steel products is expected to pick up by as early as mid-November.

“Till about September, there was a steady growth in the demand for long products, but October was a subdued month. But with the construction activity picking up, by mid-November, there should be an increase in the demand for long products. For the long products, domestic demand will dictate pricing and not price of imports,” Mr Sushim Banerjee, Executive Director (Commercial), SAIL, told Business Line.

“Real-estate sector started picking up in October. But construction is expected to start by November-December. That is the time when demand for long products should pick up,” he added.

According to data put together by ICRA Management Consulting Services Ltd (iMaCS), consumption of long products till September 2009 had shown a growth of 2.1 per cent while demand for flat products dipped 3.3 per cent. The iMaCS report also points to a decrease in imports of flat products for first eight months of the financial year 2009 as compared with 2008.

However, the large gap in prices of imported steel products and domestic products continues to hurt domestic producers. “We recently reduced the prices of flat products but still imported flat products are cheaper by about Rs 1,500 to Rs 2,000 per tonne. Although production of flat products is increasing again, especially in October, the low prices of imported products are putting a downward pressure on the prices of domestic flat steel products,” said Mr Banerjee.

Despite the increasing activity in the automobiles and consumer goods sectors, demand for flat products is yet to pick up. According to Mr Banerjee, “Procurement of domestic flat products has stopped. Consumers of these products are waiting for the coming months and the availability of imports at cheaper prices.”

More Stories on : Real Estate & Construction | Steel

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