Steel 360 Magazine - January 2021

In this issue

Steel a Lot More to Come
Just as we were breathing easy that the worst was behind us, and bracing to usher in
the new year on a note of optimism, with prospects of the vaccine emerging and
hospitals affirming a drop in cases, a new strain of SARS-CoV2 has raised its ugly head,
putting the entire world in fear of a fresh Covid wave.
But, prior to this development, many foreign financial services companies, sounded
upbeat on India’s growth. Morgan Stanley, for instance, expected India’s GDP to grow
at 9.8% on-year in 2021, after contracting 5.7% on-year in 2020. As per Nomura, the
Indian economy is expected to grow at 9.9% in 2021, eclipsing China (2021 GDP
growth pegged at 9%) and Singapore (at 7.5%) during this period.
However, the growth outlooks have their challenges. Uncertainty stemming from faster
tightening of domestic financial conditions, higher-than-expected stressed asset
creation, and slower recapitalisation of PSU banks may weigh on the growth trend,
apart from risks from a slowing global growth, said Morgan Stanley.
Nomura warns against the structural balance sheet challenges, particularly elevated
NPAs in the financial sector, constrained fiscal space and a corporate sector focused
more on deleveraging than capex.
Steel360, in this special issue, takes a look at how 2021 could pan out for the steel
industry. The market is expected to be in recovery mode. Domestic demand is moving
northward, so are prices, impelled by rising iron ore prices, tightness in scrap supply
and increased infra spending. Finished steel demand may gain almost 20% to 100.4
MnT in 2021 compared to 2020’s 81.9 MnT. With crude steel production already
nearing pre-Covid levels. it is likely to cross 140 MnT by FY22. But ore supply issues
need to be ironed out.
Enjoy the read!