Editorial June 2017

Dear Readers,
Metals industry is the backbone of any economy and their Mco-relation is quite direct and linear. This means that the fortune of metals sector depends on the general condition of the economy and is also a measure of health of any
economy.
When we say that western world economy has slowed down,
naturally its metals appetite has reduced resulting in lower metals
consumption as well as production. In Asian region, the
infrastructure building is the main agenda which requires huge
quantities of metals. This serves as a very big trigger for the regional
economy.
If we look at the famous economic curve, India is at the starting
point of the steep section of the curve whereas China is towards the
end of this section. This means that countries like China have
surpassed their best growth period and very soon their growth will be
plataued. On the other hand countries like India are about to enter
or just entered the fast growth period of the economy. The next one
or two decades are expected to witness a fast economic growth in
India and as mentioned earlier, it has a direct co-relation with the
iron & steel sector.
We all know that last 2/3 years were quite challenging for Indian
mills. Rise in input costs, stagnated demand, shrinking exports and
cheap imports had really destroyed the bottomline of many metal
companies. Now the raw material situation has gradually improved,
mega infra projects have started moving ahead and the metals
demand seems to have started increasing. All this has helped the
industry to stabilize and expect an upward transition in next few
months.
Of course, this does not mean that the Indian industry is free from
problems. Domestic demand stagnation, reducing export
opportunities and cheap imports are still shadowing the industry. A
lot of technological upgradation is required in many small and
medium scale units. If Indian products have to stand in the global
marketplace, they have to be of excellent quality. The concept of
quality also has to be upgraded. I know many metallurgical units
operating without a qualified metallurgist!

Posted in D.A.Chandekar’s Views | Leave a reply

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