Indian Steel Market Showing Signs Of Recovery, Says Aditya Mittal
The Indian steel market has started showing signs of recovery after being hit hard by the Covid-19 pandemic and subsequent lockdowns, ArcelorMittal Nippon Steel India Chairman Aditya Mittal said.
Aditya, son of steel baron LN Mittal, said operations at ArcelorMittal Nippon Steel India's (formerly Essar Steel) Hazira plant in Gujarat are running at full capacity.
The Covid-19 pandemic, he said, severely disrupted domestic demand, in particular during April. However, there is a recovery visible in the market.
"We are seeing the domestic market recover and that's a reason why our operations are running at full capacity (at Hazira in Gujarat)," he told PTI on a query pertaining to the domestic demand.
In December 2019, global steel giant ArcelorMittal announced acquisition of debt-laden Essar Steel and forming a joint venture with Japan-based Nippon Steel.
Aditya Mittal, who is also president and chief financial officer of parent ArcelorMittal, was appointed chairman of ArcelorMittal Nippon Steel India, while Dilip Oommen was appointed as the chief executive officer.
ArcelorMittal posted a net loss of $559 million for the second quarter ended June amid Covid-19 disruptions and termed the quarter as the "most difficult period in its history".
Sales in the April-June quarter were $11.0 billion, down from $19.3 billion in the corresponding period in 2019. Total steel shipments in the second quarter were 23.7% lower at 14.8 million tonnes.
On the performance of ArcelorMittal Nippon Steel India, Mittal in an investor presentation said in the second quarter, the company's crude steel production fell to 1.2 MT from 1.7 MT in January-March 2020, while Ebitda was also lower at $107 million compared with $140 million in the first quarter. The business was impacted by Covid-19, he said.
When asked if ArcelorMittal Nippon Steel India would shift its focus on exports to drive its growth, Mittal said the company would continue to focus on the domestic market to increase business.
"The focus remains on the domestic market. (In India) per capita steel consumption is much lower than most of the other countries of the world. "That is a key reason why we have made investment to be part of the growth of the Indian industry," he said.
The coronavirus outbreak led to a fall in steel demand in domestic market and this forced major steel players to look to the export markets to sell their products as demand was low domestically.
In an update on the sector, the Ministry of Steel also said the domestic steel industry has started showing signs of improvement in the month of June, after hitting the nadir in April 2020 due to spread of Covid-19 pandemic and the nationwide lockdown.
In June, the country's crude steel production stood at 6.8 MT, 17.7% higher over May and over 100% rise over April, according to the ministry data.
In terms of prices, the retail prices of hot-rolled coil, cold-rolled coil and rebar increased 1.43%, 1.69% and 2.17%, respectively, in June, due to uptick in various activities because of phased relaxation in lockdown along with an increase in exports during the month.
"The BSE Sensex and BSE Metal Indices registered an increase of 6.1% and 4.7%, respectively, in June, indicating a recovery after lockdown," it said.