JSW Steel, one of India’s fastest growing companies and second largest steel manufacturer, reported a production of 0.56 million tonnes of crude steel in the month of April. This is a massive downturn of about 60% in the production of steel from last year. In the first full month of Coronavirus lockdown, the capacity utilization has fallen 38%.
While market pundits will analyze this downfall, there is no denying the fact that the Coronavirus outbreak has led to this severe condition of the Indian economy. In a developing country like India, steel is the most important need, owing to its great significance in the development of infrastructure. Although JSW is the first to announce its monthly production stats, other companies are also in line with such dismal shows in the days to come.
Many are asking about the future of the steel industry in India after the lockdown ends, since resuming the businesses suddenly in full flow might not be an easy task. Here comes the need to have government’s intervention. It needs to take more responsibilities than ever and pump in some money in the market so that the economy could take a positive turn. Since workers have already returned to their hometowns, the government machinery should plan their safe and quick return to respective metropolises.
Talking about other numbers released by JSW Steel, it produced 0.34 mt of flat steel products (that are used in automotive and heavy machines). This number was 0.95 mt in the previous year. The good thing that we witnessed is that the industry was allowed to operate even during the lockdown. This, however, has not stopped the heavy loss of jobs in the country. The lack of domestic demand made the situation even worse. To ensure fewer job losses, people in the government need to discuss the idea of ending the restrictions in certain areas.