On the evening of May 12, Indian Prime Minister modi said in a televised speech that India would launch an economic stimulus package totaling 20 trillion rupees (US $267 billion). However, it also announced that it would extend the national blockade time again, and the specific requirements would be announced before May 18. It is reported that India began to implement the national blockade on March 25, and after two extensions, the current national blockade period is May 17.

The upcoming economic stimulus package is undoubtedly a "dawn" for India's steel industry, which has been seriously affected by the outbreak, but the extension of the blockade still means that its recovery path is long. At the same time, the reduction of steel production in India will greatly reduce its demand for iron ore, and the iron ore industry in India, which is also affected by the epidemic, may expand the proportion of exports.

Demand plummeted

At present, the capacity utilization rate of six major steel enterprises is reduced to 51%

Novel coronavirus pneumonia and steel prices in India began to rebound at the end of November last year and last until early March this year. This trend ended abruptly in the last week of March in India. With the announcement of India's national blockade, almost all industries have been "suspended", which has a serious impact on Indian steel production and consumption.

Seshagiri Rao, CO managing director and chief financial officer of jswl, India's largest steel producer, said that the national blockade has seriously affected the production and operation of the steel industry and reduced demand. The government must take measures to support the development of the steel industry through fiscal or monetary policies. Especially for the small and medium-sized enterprises in the steel industry, due to the broken capital chain, and facing the problems of labor shortage and limited logistics, their recovery will take longer.

According to the data released by the Ministry of iron and steel of India, the capacity utilization rate of crude steel in India fell to 67.8% in March this year, compared with 84.7% in March last year and 80.7% in February this year; the output of crude steel in March this year was 8.04 million tons, down 19.92% year-on-year and 15.9% month on month (see Table 1). In March, the output of finished steel products in India was 7.09 million tons, a year-on-year decrease of 23.68% and a month on month decrease of 14.58% (see Table 2); the consumption of finished steel products was 6.71 million tons, a year-on-year decrease of 29.54%. In terms of import and export, India imported 380000 tons of finished steel products in March, a year-on-year decrease of 46.67%; and exported 570000 tons, a year-on-year decrease of 3.21%.

According to the data released by the Ministry of iron and steel of India, the output of crude steel and finished steel of small and medium-sized enterprises other than six large iron and steel enterprises in India fell significantly higher than the average in March.

In April, the situation deteriorated further. Seshagiri Rao said that the average capacity utilization rate of the six major iron and steel enterprises is only 51% at present (in the first ten days of May), while the steel demand of India in April was 700000 tons, down 91% year-on-year (7.5 million tons in April last year); at the same time, the bank loans of iron and steel enterprises have also declined significantly.

Jswl said in a notice submitted to the Bombay Stock Exchange that despite the deregulation of the government in many regions and the gradual increase of the company's output, the crude steel output in April was only 563000 tons, down 60% year-on-year, 52% month on month, and the capacity utilization rate was 38%.

In April, the crude steel output of jspl (jingdeloitte steel and electric power company) was basically the same year-on-year, at 650000 tons, but the steel sales volume fell to 455000 tons from 642000 tons in the same period last year, a 29% drop. Jspl had previously said it was trying to export steel to Vietnam, Saudi Arabia, Thailand and Europe, due to weak domestic demand.