Tata Steel remains on guard against Covid pandemic even as it expects the demand for steel next fiscal to match the GDP growth rate with the possibility of lower imports.

TV Narendran, Managing Director, Tata Steel, said the company is certainly back to where it was before the pandemic and expect the trend to continue through FY22.

However, he said, “the pandemic is not behind us yet and we cannot let our guard down. The company has always risen to challenges of a highly cyclical industry and emerged stronger through down cycles.”

The company sees the increased inflow across sectors and government spending in infrastructure to keep the demand strong.

He said steel demand in the country should grow at least at the rate of GDP growth or higher in FY’22.

Typically, he said this is the trend in a developing country though traditionally in India steel demand has been lower than the GDP growth rate.

PLI boost

Besides inflow of funds across sectors, Tata Steel expects the government’s efforts to improve infrastructure spending coupled with the ‘Atma Nirbhar Bharat’ policy and the Production Linked Initiative to boost the money inflow into the system. Further, the government’s focus on rural infrastructure projects will also give an impetus to steel demand, it said.

Globally, steel prices are likely to stay firm as China is not expected to export large volumes owing to a better balance in their domestic market, and there are no other significant exporters in the world market, said Narendran.

Tata Steel expects a mixed bag as far as raw material prices are concern with huge demand for iron ore in China driving up prices and coal prices remaining soft due to excess supply in Australia.

Steel companies capacity utilisation to improve with healthy order books. However, most steel producers prefer to sell more in the domestic market. Overall the demand-supply situation favours the steel producers with strong international prices.

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