India’s steel consumption grew by 3.4 percent to 5.8 million tonnes in April 2014 over the same month a year ago. However, it witnessed a sharp 12.9 percent decline over the preceding month, indicating sluggish investment demand in the country. Domestic crude steel production grew by 2.7 percent to 6.8 million tonnes during the month from a year earlier. The major steel producer such as Tata Steel, SAIL, RINL, Essar Steel, JSW and JSPL together produced 3.7 million tonnes in April, while the remaining came from minor producers. Steel imports spurted by 14.1 percent to 0.494 million tonnes, whereas, exports increased by 13 percent to 0.461 million tonnes during the reported month.
As steel demand is derived from construction and automobile sectors, the performance of the steel industry is therefore largely dependent on overall economic growth of the country. Construction sector accounts for around 60 percent of the country's total steel demand, while the automobile industry consumes 15 percent of demand. Over the past two financial years, Indian steel industry is struggling with slowdown due to the weak steel demand. India’s finished steel consumption grew at a four-year low rate of 0.6 percent to 73.93 million tonnes in FY14 mainly impacted by a prevailing economic slowdown and high interest rates.
Domestic crude steel production increased marginally at 3.8 percent to 81.3 million tonnes in 2013-14. Along with weak demand, high input cost due to increased prices of raw material, such as iron ore has also become a main concern for domestic steel players, impacting their margins. The government has been taking various measures to enhance the domestic steel demand. Earlier in March 2014, it has relaxed the norms for import of steel and its products to boost domestic steel production and infrastructure development.