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India's steel output improves marginaly, growth rate falls below world average

KOLKATA: India's steel production went up by a marginal 0.9% to 6.45 million tonne (mt) in June 2013, compared to 6.39 mt in June 2012, even as the country's rate of growth in steel output slipped below the world average during the month. Global steel output touched 132 million tonne in June 2013, a 1.9% increase over June 2012, latest figures fromWorld Steel Association (WSA) said. 

"There has been a softening of steel demand at the global level. But in case of India, it is not a question of lower demand per se but that of suppressed demand. A lot of proposed infrastructure projects, including highways, power plants, railway projects and construction activity have not taken off due to various reasons. This has resulted in low offtake. China continues to grow because of its construction and infrastructure activity. In India, there exists latent demand for steel due to lack of new infrastructure projects. This is a fundamental difference between India and other regions which are experiencing low demand," Kameswar Rao, executive director, PwC (energy, utilities & mining), said. 

However, WSA data for the first six months of 2013 indicate India's performance was better than world average. The country posted a 2.5% growth in steel production to 39.63 mt in the six month period January-June 2013 against 38.68 mt in the same period in 2012. During the same period, world crude steel production was 789.8 mt, an increase of 2% compared to the same period of 2012. 

A leading global steel body, WSA represents approximately 170 steel producers, including 17 of the world's 20 largest steel companies and its members represent around 85% of world steel production. 

While other regions recorded negative growth in the first half of 2013, it was Asia which showed an increase of 5.5%. China's crude steel production for June 2013 was 64.7 mt, up by 4.6% compared to June 2012. Elsewhere in Asia, Japan produced 9.3 mt of crude steel in June 2013, an increase of 0.9% compared to the same month last year. However, 
South Korea reported lower growth during the month. The country's crude steel production was 5.5 mt in June 2013, down 5.4% compared to June 2012. In terms of monthly steel production, the EU 27 produced 5.1% less in June 2013 and North and South America produced 5.8% and 4.6% less, respectively, during the month.