FY22 outlook: Steel demand should grow at GDP growth rate, says Tata Steel CEO T V Narendran

Tata Steel CEO and managing director T V Narendran on Wednesday said the steel demand in the country should grow at least at the rate of GDP growth or higher in FY22. He expressed optimism about the demand for steel in India in 2021, backed by inflow of funds from across sectors and an uptick in the overall consumption; government’s efforts to improve infrastructure, coupled with the ‘Atmanirbhar Bharat’ policy and the Production Linked Incentive (PLI) initiative. Additionally, the government’s focus on rural infrastructure projects will also give an impetus to the steel demand.

Commenting on the outlook on steel prices, he said, globally, steel prices were likely to stay firm as China was not expected to export large volumes owing to a better balance in their domestic market, and there were no other very significant exporters in the world market. “We are optimistic about the overall demand for steel and hence the performance of the steel industry and Tata Steel,” he said.

On raw material prices, Narendran said it would be a mixed bag. Iron ore has seen a sharp rise in prices primarily because China has recovered quite well. Coal prices have softened because of the geopolitical issues between China and Australia. Consequently, more coal is available from Australia in the world market and India being a big importer of coal is witnessing softening of prices.

He highlighted that currently, capacity utilisation of most of the steel producers in the country has improved and they have healthy order books, while maintaining a cautious stance with regards to the Covid-19 pandemic. “Most steel producers, including us, do prefer to sell more in the domestic market. Overall, the demand-supply situation favours the steel producers with strong international prices. We are certainly back to where we were before the pandemic and we expect the trend to continue through FY22. The pandemic, however, is not behind us yet and we cannot let our guard down,” he said.