Times Of India reported that Dr BN Singh, a former chairman and managing director of Rashtriya Ispat Nigam Ltd said that “That the crude steel production has declined over June is reflective of the broader softening in the economy. When there is no demand from critical industries like construction and the automobile sector, then steel manufacturers will certainly face the slowing demand. Apart from the real-estate sector, there is also lesser demand from the infrastructure sector as well which consumes a lot of steel, particularly long products. I think that going forward, unless the government spends a lot more on infrastructure, the demand for steel in India may face less demand.”
Dr Singh said that “Some Indian steel companies like RINL-VSP have increased their capacity hoping that a growing economy will need more steel. To be fair to RINL-VSP, the company launched its plan to increase its capacity from 3 million tonne per annum to 7.4 million tonne per annum a while back, but the new capacity has come online only recently. It will be a challenge for RINL-VSP to service the debt it raised for its expansion.”
Source of information