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Imbalance in demand and supply rocks steel prices in India
The Indian economy experienced an economic slowdown with high inflation in fiscal year 2012. India’s steel industry also suffered a minor slowdown but managed to record a y/y consumption growth of 6.8% which was the second lowest in a decade.
The differential in domestic and global prices of steel triggered the steel imports, negatively affecting the domestic producers and bringing the domestic prices down.
•In fiscal year 2012, the Indian steel industry recorded a production of around 74MT. The total crude steel production grew by 4.4% y/y against FY11 figure.
•In FY12, the consumption grew by 6.8% to around 71MT which was the second lowest growth figure in the past 10 years.
•Indian finished steel exports grew by 11.1% in FY12. However, the total finished steel exports came down by 23% compared to the FY07 figure. India was a net exporter of steel till FY07. Since then, the total imports of steel have exceeded the total exports every year.
•Steel imports grew by 48.3% y/y in the first seven months of 2012 to touch the 4.7MT mark. Imports accounted for around 11% of the total steel consumption in the country during this period.