The first half of the current fiscal has shown a growth of 4.5% in crude steel production in India at 49.8 MT. On an annualized basis and assuming a normal hike in production in H2, the estimated production of crude steel in FY18 may be taken as 103 MT in the minimum which would imply a capacity utilization rate of around 81%.The capacity utilization in steel at the global level currently stands at 72.2%.One of the primary reasons for growth in steel production and higher capacity utilization in global steel market is on account of higher realization in EBITDA of steel manufacturers since the beginning of the current year. It can be safely concluded that the sustainability of the global demand is crucial for price stability in Indian market. Although there is a forecast of falling prices in Iron Ore and Coking Coal in the coming months, the steel price level would be dependent on the real demand movement in the domestic market rand higher export efforts.

(Financial Express)