Indian steel demand is expected to plunge to multi-year lows in 2020, hit by slowdowns in the construction, automotive and rail sectors as India fights the coronavirus with a protracted lockdown, a leading industry body said.
Steel demand in India is set to contract 7.7% in 2020 with "significant downside risks", the Indian Steel Association (ISA), which represents some of the top steel producers, said in a note.
"ISA had estimated in February that the steel demand in calendar year 2020 would grow by 5.1% to touch 106.7 million tonnes. We have now revised the steel demand forecast to 93.7 million tonnes," it said.
Indian Prime Minister Narendra Modi has extended the nationwide lockdown until May 3, but the federal government has allowed states to restart some activity amid economic distress in rural areas.
The coronavirus outbreak has left the Indian automotive industry in distress, with automakers seeking temporary tax cuts on cars, trucks and motorbikes as well as incentives to scrap old vehicles.
The lockdown's impact on economic activity will dent 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.
Most steel companies have faced disruptions and suspended operations at some of their plants. JSW Steel Ltd, which has the biggest capacity in India, this week said it was evaluating a phased restart to operations.
Late last month Steel Authority of India Ltd, the country's largest state-owned steelmaker, said some customers had cancelled orders because of port disruption as the lockdown hobbles movement of goods.