MUMBAI (Commodity Online): Recovery of Indian economy reflected in the consumption of steel in the country.

According to reports, robust demand from auto and consumer durable sectors boosted the steel consumption by 4% in August compared to same period last year.

Reports said steel consumption rose to 4.59 million tonnes last month against 4.41 million tonnes in August, 2008.

Demand outlook for the metal is strong in the coming months with strong signs of an economic recovery. The government expects steel demand to touch double digit mark (10%) by the end of the current fiscal.

Against an increase in steel consumption, its production during the August fell 1% to 4.7 million tonnes. The fall came even as the leading steel producers such as Steel Authority of India (SAIL) and Tata witnessed up to 20% growth in production. SAIL and Tata alone constitute more than 30% of India’s total annual steel production, which is around 56 million tonnes.

The steel ministry is awaiting final steel growth data, and hopes to see some correction in August production figures. Demand was at its peak in August last year, and growth in consumption in August this fiscal is a clear indication that things are looking up for the steel sector. The rising price of flat steel products is also an indicator that that demand is strong.

While long steel products used for construction activities has not witnessed any major price correction for past few months, flat steel prices have moved up in almost every month in the current financial year registering an increase of 15-18% in the April-August period of 2009. Giving rationale for less than expected growth in steel production, another steel ministry official said that companies are yet reach the peak production levels of early 2008-09.

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