Producers of long steel products in India’s secondary sector are poised for a notable revenue increase of 7% in the current financial year, according to a recent report by Crisil Ratings. This anticipated growth marks an improvement from the 4% rise observed in the preceding fiscal year and is largely attributed to heightened domestic demand spurred by substantial government investments in housing and infrastructure.
Secondary steel manufacturers, which utilise recycled materials through methods such as electric arc furnace (EAF) and induction furnace (IF) processes, have seen a resurgence in demand, particularly under initiatives like the Pradhan Mantri Awas Yojana and the National Infrastructure Pipeline. These government programmes aim to boost both rural and urban housing, thereby fostering increased construction activity.
The Director at Crisil Ratings emphasized that steady realization rates and rising production volumes will significantly enhance revenue for secondary long steel producers. “This fiscal, we expect the sector’s capacity utilization to rise to 83% from 80% last fiscal year,” Guha stated.This increase is projected to elevate EBITDA per tonne to Rs 4,000, up from Rs 3,700, leading to improved cash accruals for producers and enabling further investments. This growth not only indicates a positive trend for the steel industry but also reflects broader economic recovery, as increased infrastructure development is expected to boost demand for long steel products across sectors like real estate and public works.
From a sustainability perspective, reliance on recycled materials in secondary steel production is crucial. The use of electric arc furnaces, which consume significantly less energy than traditional blast furnaces, reduces carbon emissions and supports a more sustainable manufacturing process. By enhancing recycling rates and prioritizing environmentally friendly methods, the secondary steel sector aligns itself with global sustainability goals, addressing both economic and ecological challenges. This anticipated growth reflects resilience and responsibility, as producers prepare to meet rising demand while fostering sustainable practices, positioning the sector as a key player in India’s economic landscape and paving the way for a greener future.
As the financial year progresses, stakeholders across the board will be keenly observing these developments, recognising the importance of sustainable practices in driving long-term growth and environmental stewardship. The future looks promising, not only for steel producers but also for the communities that rely on their products and the infrastructure projects that will shape India’s development.
