While real growth in demand still eludes the steel sector, market prices are showing an uptrend mainly due to increased stocking of material by the traders, buoyed by the improved sentiment, Amitabh Mudgal, President (Marketing and Corporate Affairs), Monnet Ispat and Energy Ltd, told ISMW.
“When demand goes up, each segment (in the supply chain) starts stocking some material.
So, right now, as the sentiment has improved, people have started stocking material with them, but the real demand is actually yet to see a pick-up,” Mudgal said.
He said, the current demand scenario is rather dismal, but an improvement is expected over the next two quarters.
While the protection given to the domestic manufacturers (by safeguard duty and minimum import price) has helped in improving sentiment, the high spending on road and infra sectors announced in the Budget should lead to higher consumption.
“Demand should pick up now, with the budgetary allocation of Rs 218,000 crore in infrastructure projects, including railways….We will be watching for the next two quarters as to which way things are going,” he added.