The Indian steel industry is most likely to hit the lowest rate in a lot of years as the country remains under lockdown until May 3, 2020. In a feat to contain the pandemic from spreading in the country, the central government had earlier announced a 21 day complete lockdown until April 14, 2020 that got extended to May 3.
The nationwide lockdown had resulted in the stagnation of work in most of the business sectors of the country and being a core manufacturing industry, steel production, import and supply has been hit hard by the pandemic shockwave.
The demand for steel in India is set to contract 7.7 percent in 2020 with “significant downside risks”,
the Indian Steel Association (ISA), which represents some of the top steel producers had expressed this in a note. “ISA had estimated in February that the steel demand in calendar year 2020 would grow by 5.1 percent to touch 106.7 million tonnes. We have now revised the steel demand forecast to 93.7 million tonnes,” it said.
Though the Indian Prime Minister Narendra Modi has extended the nationwide lockdown until May 3, some of the federal government have allowed states to resume a fraction of activities amid the long drawn economic distress in the rural areas of the country. The COVID-19 outbreak has left even the Indian automotive industry in deep distress, with most of the automakers seeking temporary tax cuts on cars, trucks and motorbikes as well as incentives to scrap their old vehicles.
The lockdown’s impact on economic activity all across the country will dent the steel demand by nearly 13 million tonnes, Arnab Kumar Hazra, Assistant Secretary General at the Indian Steel Association, told Reuters, adding that demand growth is at a multi-year low.
Not only the steel and the automotive industry, other core manufacturing industries along with infrastructure and construction are being hit as a lockdown effect.
Moreover, as a matter of fact, all the capital that are being claimed to be in losses are actually capital getting stagnant. It is not that economies do not have the capital needed. Along with the whole nation, the capital is also under lockdown.