Indian Steel Association revises steel demand forecast

The Indian Steel Association (ISA) has significantly revised downwards India’s steel demand forecast for 2020.

Demand is now expected to shrink by 7.7 percent in 2020 as per a revised forecast. This is in contrast to a projection of 5.1 percent positive growth made in February.

ISA estimates finished steel demand in India to fall in calendar year 2020 to around 93.7 million tons from an estimated actual of 101.5 million tons in 2019, a decline of 7.7 percent or roughly by about 8 million tons this calendar year.

Interestingly, ISA had estimated in February that the steel demand in calendar year 2020 would grow by 5.1 percent to touch 106.7 million tons. But the association has now revised the steel demand forecast to 93.7 million tons. In other words, ISA estimates that the spread of the pandemic and subsequent lockdown will lead to steel demand declining by 13 million tons or by 12.2 percent from a business as usual scenario.

The Indian economy was in the midst of a slowdown in 2019 with steel demand remaining tepid throughout the year. However, green shoots in the economy were visible in the first two months of 2020, evaluated in accordance with the seventeen parameters ISA tracks.

Just when a rebound, in both manufacturing and the services sector, was beginning to take root, the Covid-19 pandemic surfaced in India and sparked off an economic and social crisis of significant proportions.