managing director, V R Sharma, said that the demand was mainly coming from the infrastructure segment. "There is a huge inflow of orders. We have orders till July 31."
According to Sharma, next month, domestic sales would account for 70 per cent of total sales. The current increase in domestic sales was more than anticipated, he added.
However, construction in urban areas of northern and western parts of the country, largely under curbs, was yet to take off; in eastern and central India, where labour was not an issue, activities have restarted.
Construction happens to be largest end user of steel accounting for about 60-62 per cent of steel end-use mix.
Automobile, which accounts for 15-16 per cent of steel usage, is expected to see a gradual recovery. According to steel industry officials, the recovery will be sector specific. Overall, a normalisation of demand to pre-Covid levels is not expected before the third or fourth quarter. Till then, exports is likely to be the silver lining.
According to an ICRA report, domestic demand crashed by 87 per cent in April while exports as a percentage of finished steel of total finished steel produced during the month stood at a record high of 28 per cent.
As against Europe, which remained one of the major export destinations for Indian steelmakers with a share of close to 20 per cent in FY2020, the UAE, Vietnam and China together contributed 64 per cent to the total finished steel exports in April 2020, said the ICRA report.
However, China which has emerged as a significant market for Indian steelmakers has been importing mostly semi-finished steel. Though the exact quantum of semi-finished steel to China is not known, overall exports of semi-finished steel from India grew by 66 per cent in April 2020 as against total steel export growth of five per cent.
However, in April, most of the end users of steel were shut, and relaxations to lockdown
were made thereafter. "The unlocking started after June 8, so sales will be good," said Sharma.
Domestic sales, though has picked up, is far lower than normal levels. For most of the major steel producers, domestic sales is much higher than the share of exports as realisations are higher.
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