Global excess capacity behind drop in Indian steel exports
Industrial production figures for the month of July just available from CSO indicates a growth of 6.6% contributed by a 7% growth each in Manufacturing (wt: 77.6) and Electricity generation (wt: 7.99). The growth of manufacturing of fabricated metal products at 10.4%, electrical equipments at 7.9%, motor vehicles and trailers at 14.1% out of which commercial vehicles at 28.1%, other transport (wagon, coaches, ships) at 18.9% and furniture at 42.7% are the segments that have maintained a more than moderate growth rate during the month. Among the steel products, mention may be made of SS Utensils growing at a staggering 76.2% followed by production growth of Alloy/SS Bars and Rods at 23.4%.
The major drivers of steel consumption, namely, infrastructure and construction and automobile are playing their cards quite well to push up the consumption level. The infrastructure/construction goods segment has moved up by 8.4% in the month. The consumer durable segment, however, notched up a monthly growth of (- )1.5% which has pulled down the average growth of the segment from 14.4% last year to 9.4% in the current period. In the overall analysis the IIP is playing a positive role in providing an enabling environment for growth in steel demand.