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India’s steel industry suffered a severe setback due to the COVID-19 pandemic in the first half of the year, Fitch Solutions said, adding that it expects a slow recovery to pre-crisis levels.

New Delhi: India’s metals sector has suffered a severe blow due to operational difficulties and weak demand due to COVID-19 and a slow recovery in production to pre-pandemic level is expected in the coming quarters, Fitch Solutions said in a report. According to the report, a sharp decline in domestic demand for metals is expected and it will take at least until 2022-2023 to return to pre-pandemic levels.

“The Indian metals sector has been severely affected by COVID-19 during the year to date, and we expect metals production to recover slowly to return to pre-pandemic levels in the United States. over the next few quarters, ”said Fitch Solutions.

While local production is likely to find a respite in the maritime market as exports, Fitch Solutions said it believes this will not be enough to offset the decline in domestic consumption, especially since the situation in the global demand itself remains moderate.

A nationwide lockdown has been imposed in the country due to COVID-19 from March 25 to May, which severely disrupted economic activity, especially construction, which is the main end user of metals produced in India .

Fitch Solutions is part of the Fitch group.

“The persistent state-level controls of COVID-19 movements in place since the country lifted nationwide restrictions amid an outbreak of COVID-19 still prevalent in many large states have continued to weigh on the economy, “he said.

While the mining and metals sector was allowed to continue operating, worker absenteeism was widespread and most companies were operating at 60 percent of capacity, according to the report.

“As the daily new COVID-19 cases in India continue to accelerate nationally, our country risk management team has revised our forecast for India’s real GDP for fiscal year 21 (April 2020). -March 2021) to contract by 8.6%, against 4.5%. contraction before, ”he said.

India’s steel industry suffered a severe setback due to the COVID-19 pandemic in the first half of the year, Fitch Solutions said, adding that it expects a slow recovery to pre-crisis levels.

Longer term to 2029, India will be the bright spot for global steel production growth as demand from the construction, automotive and infrastructure sectors continues to accelerate. he added.

Also read: Auto industry to revive by FY24 with stimulation of demand: Rajan Wadhera


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