It has been a topsy-turvy ride for the steel industry, which has invested huge capital to shore up production, but is fighting cheap imports. Seshagiri Rao, JMD of JSW Steel, spoke to BusinessLine on the way ahead.

How do you see the coming year for the steel industry?

The World Steel Association has estimated steel demand for 2017 to be higher by 0.5 per cent, mostly driven by revival in advanced economies and emerging economies excluding China. While the excess steel supply in China remains a worry for this year, Indian steel demand is expected to be better due to expected increase in government infrastructure projects outlay.

How was last year for the industry?

The year 2016 started with bleak outlook, when steel prices fell below $300 per tonne due to dumping of steel by China, Japan, Korea and others. There was a smart recovery in prices from March driven by a huge infrastructure stimulus package announced by the Chinese government. Many countries including India initiated remedial actions to stop unfair trade that necessitated the Chinese government to announce a stimulus package to spur domestic demand. India’s steel demand was sluggish in the first half of 2016. Construction activities remained subdued due to water shortage and monsoon from July to September. When it was anticipated that good monsoon and 7th Pay Commission revisions would spur consumption and domestic demand, there was deferment in demand due to demonetisation.

Your demand growth expectation for the industry?

Once normalcy is restored on remonetisation, the deferred demand is expected to come back. This along with higher outlays on infrastructure spending by the government will lead to robust steel demand this year.

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