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Steel demand remains strong

Steel demand remains strong
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According to news reports, steel consumption in the country has been maintaining an average growth between 6.8% – 7.5% in the past 27 months. It is believed that this growth has been primarily due to higher demand from infrastructure and construction sector. Demand for steel from the manufacturing sector has been low due to a temporary slowdown in the sector.

With Government stepping in to ease liquidity crisis at NBFCs, fund flow to the manufacturing sector is expected to improve boosting growth prospects of the sector. This will, in turn, boost demand for steel. 

The economic survey had suggested incentivizing MSMEs (including those in basic metals, fabricated metals, machinery, transport equipment, etc.) in the manufacturing sector.  Government is expected to react positively to this, providing further impetus to the demand for steel.

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Markets update

Concerns around trade wars and weak corporate earnings in the April – June quarter pulled down benchmark indices this week. Nifty closed down 1.15% at 11,419.3 and Sensex ended down 1.03% at 38,337.0.

The wholesale price index for the month of June 2019 eased down to 2.02% from previous months 2.45% levels. The actual numbers were marginally below street estimates of 2.2%.

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Steel demand remains strong
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