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    Domestic steel demand to bounce back in next quarter: Seshagiri Rao

    economy | IST

    Domestic steel demand to bounce back in next quarter: Seshagiri Rao

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    October has witnessed a good recovery in domestic demand. Therefore, Seshagiri Rao Group CFO of JSW, believes that now, this domestic demand will drive growth in the second half of the financial year as far as steel is concerned.

    The domestic demand in the last two quarters, because of the second wave of COVID-19 and monsoon, was subdued. However, Seshagiri Rao, Group CFO of JSW, feels that now there is light at the end of the tunnel.
    “In the month of October, we are seeing a good recovery in the domestic demand. Therefore, now the domestic demand will drive the second half of the financial year as far as steel is concerned,” he said.
    It is noteworthy that metals have seen some profit-taking across the board and more so in the case of ferrous metals where the iron ore and steel prices are declining again. Steel prices have plunged 18 percent to Rs 4,900—a three-month low from the all-time high of Rs 5,975.
    Rao sees that the overall demand in the metal sector is now set to rise.
    “Demand is coming majorly from two areas – one is infrastructure spend by the government and also very strong recovery in the demand in global markets,” he said.
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    Rao believes it is the beginning of the capex cycle and it will accelerate going forward. “Because the monetary and fiscal policies of various governments are in favour of the revival of demand and also the growth-oriented policies both together capex cycle revival will commence,” he said.
    “We do see private capex in certain specific areas. Steel and cement plants we see some expansion. There are various electronic and smaller factories which are coming up. I would say the capex is more from the central government, the multilateral funded jobs and to a certain extent on the private side, which is more on the basic infrastructure capex like cement and steel,” he said.
    According to him, renewables have gone through a massive churn in the last few months.
    He expects solar prices to settle down in the next 3-4 months. “I don’t see the solar going in the same manner that it went on a few months back,” he said.
    For the entire discussion, watch the accompanying video.
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