NEW DELHI — Steel Authority of India Ltd. and Tata Steel Ltd. said Thursday steel sales will likely climb in the quarter through March on a rise in demand from key sectors, including automobiles and construction.
“Sales in March are going to be higher than March last year…we will also do better than February, when we grew 9% (on year),” S.K. Roongta, chairman of state-run SAIL, said on the sidelines of an industry conference.
Tata Steel, which controls European steel maker Corus, will produce more steel in India in the current quarter than in the previous quarter to meet higher demand, said J.J. Irani, a director at the private steel producer.
Tata Steel produced 1.23 million metric tons of steel in India in the third quarter, almost 1% down on year. Sales declined 14% to 1.07 million tons.
Higher borrowing costs and fears of job losses in a slowing economy have hit the sales of cars and apartments in India, Asia’s third-biggest economy. This has affected steel offtake by the automotive, real estate and infrastructure sectors, leading to lower prices and higher inventory with steel producers. The global economic slowdown has also affected exports.
“We are seeing good demand from construction and auto and in semi-rural areas,” Mr. Roongta said. “Next (financial) year, we think demand in India (for steel) will grow compared to a contraction globally.”
He added steel prices were currently “stable” in India, “lower than international prices.”
Mr. Irani said the economic scenario for steel “is much better than it was three months ago.”
Source: Dow Jones Newswires