India’s steel consumption registered a modest growth of 3.3 percent to 73.3 million tonnes in FY13 lowest in the last three years on the back of subdued demand because of the prevailing economic slowdown and high interest rates. The consumption of steel, used mainly in construction and consumer durables, grew by 5.5 percent in FY12 and 9.9 percent in FY11.
While, total steel production expanded by just 2.5 percent during FY13 to 75.5 million tonne. Decline in consumption forced almost all steel companies to resort to curtailing capacity utilization. A stubbornly-high inflation and a tight monetary policy forced consumers to postpone buying decisions leading to subdued demand for steel.
Steel industry is highly correlated to the growth of the economy as its demand depends upon the manufacturing activities around the country. A sound economy ensures higher consumption.
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