The Indian steel market has started showing signs of recovery after being hit hard by the COVID-19 pandemic and subsequent lockdowns, ArcelorMittal Nippon Steel India Chairman Aditya Mittal has said.
Aditya, son of steel baron LN Mittal, said that operations at ArcelorMittal Nippon Steel India’s (formerly Essar Steel) Hazira plant in Gujarat are running at full capacity.
He said that the COVID-19 pandemic severely disrupted domestic demand, in particular during the month of April; however, there is a recovery visible in the market. “‘We are seeing the domestic market recover and that’s a reason why our operations are running at full capacity at Hazira,” he said.
In December 2019, global steel giant ArcelorMittal announced acquisition of debt-laden Essar Steel and forming a joint venture AM/NS India with Japan-based Nippon Steel. Mittal, who is also president and CFO of parent company Arcelor Mittal, was appointed chairman of AM/NS India, while Dilip Oommen was appointed as the CEO.
ArcelorMittal posted a net loss of US $ 559 million for the second quarter ended June 30, 2020 amid COVID-19 disruptions and termed the quarter as the most difficult period in its history. Sales in the April-June quarter were US $ 11.0 billion, down from US $ 19.3 billion in the corresponding period in 2019.
Total steel shipments in the second quarter of 2020 were 23.7 per cent lower at 14.8 million tons. On the performance of AM/NS India, Mittal in an investor presentation said that in the second quarter, the company’s crude steel production fell to 1.2 MT from 1.7 MT in January-March 2020, while EBITDA was also lower at US $ 107 million as compared to USD 140 million in the first quarter. “The business was impacted by COVID-19, he added.”
When asked if AM/NS India would shift its focus on exports to drive its growth, Mittal said the company would continue to focus on the domestic market to increase business. “The focus remains on the domestic market. In India per capita steel consumption is much lower than most of the other countries of the world. That is a key reason why we have made investment to be part of the growth of the Indian industry,” he said.
The coronavirus outbreak led to a fall in steel demand in domestic market and this forced major steel players to look to the export markets to sell their products as demand was low domestically. In an update on the sector, the ministry of steel has also said that the domestic steel industry has started showing signs of improvement in the month of June, after hitting the nadir in April 2020 due to spread of COVID-19 pandemic and nationwide lockdown.
In June, the country’s crude steel production stood at 6.8 million tonnes, 17.7 per cent higher over May 2020 and over 100 per cent rise over April 2020, according to ministry data. In terms of prices, the retail prices of hot rolled coil, cold rolled coil and rebar increased by 1.43 per cent, 1.69 per cent and 2.17 per cent respectively in June, due to uptick in various activities because of phased relaxation in lockdown along with an increase in exports during the month.
The BSE Sensex and BSE Metal Indices registered an increase of 6.1 per cent and 4.7 per cent, respectively, in the month of June 2020, indicating recovery after lockdown, said the steel ministry. PTI