Jindal Steel and Power Managing Director V R Sharma said the company had exported 80 per cent of goods this month.
“Next month, we plan to bring it down to 50 per cent and eventually to 30 per cent,” he said. However, reducing export volumes would be contingent on domestic demand.
Industry sources said deals of 200,000 tonnes of hot rolled coil (HRC) were reported from India to Vietnam and China in the last few days at $390-$405 per tonne. Given the current demand scenario, most steel companies
were not looking at an immediate ramp-up.
According to a spokesperson for ArcelorMittal Nippon Steel
India, the current low demand for steel and supply chain disruption situation do not permit us for the full ramp-up. “The ramp-up will be done gradually as demand improves,” he added. Companies are looking to cater to the market from the current level of inventories. Steel Authority of India sources said that it had an inventory of 1.7 million tonnes and was monitoring offtake from customers before ramping up from current level of production.
The other steel PSU, Rashtriya Ispat Nigam, has an inventory of five lakh tonnes and is looking to ramp up once it starts liquidating. Currently, it is operating at 30-40 per cent production level.
The Ministry of Home Affairs guidelines for resumption of industrial activities are effective Monday, but according to the Indian Steel Association, any kind of demand recovery will take at least another month. The association believed that overcoming challenges in the form of getting migrant labourers back into manufacturing/construction zones, resetting disrupted supply chains and overcoming liquidity constraints particularly towards working capital needs, cannot be accomplished overnight. However, Sharma said demand to explode once lockdown was lifted.
Exports had become the focus, as there was virtually no domestic demand. The Indian Steel Association, which represents major public and private sector units, said on Sunday that it expected demand to contract 7.7 per cent in 2020 because of measures taken to contain the pandemic. In February, it had projected 5.1 per cent growth in demand.