>STEEL SECTOR (GEPL)

Crude steel production in all major steel producing countries/continents declined 3% in the month of Apr -09 compared to Mar-09. However, the production was down by ~24% on YoY basis. Asia (mainly China and India) which produced highest steel in the month of Mar-09 since Oct-08 was 3% down in the months of Apr-09. Steel production in all major countries/continents declined by up to 8% on month-on-month (MoM) basis led by EU (-8.1%), China (-3.7%), India (-3.3%), CIS countries (-3.3%).

During Jan-Apr 09 period, the world crude steel production was down 22.7% YoY led by US (-53%), EU (-44%), CIS (-33%) and Japan (-43%). India reported only 1.6% fall in production whereas China produced flat during the same period.

Steel prices in all major markets were on uptrend in last one month except the US. Steel prices in China and India went up by ~16% and ~2% in last one month. On the contrary, steel price in US continued its downtrend and fell ~6%. Indian steel association urged the government to impose a safeguard duty of 25% on imported HR coil and other flat products due to higher imports. The government did not take any such measure due to lack of evidence.

Total steel inventory at Shanghai, China which was falling continuously, started moving up from the beginning of May-09. The rise in inventory level was mainly due to lower consumption of steel due to increase in steel prices in China.

China steel export was also down in the month of Apr-09 compared to Mar-09. According to China Iron and Steel Association (CISA), China steel export may fall by 80% in CY09 to 12 mt (Vs 60 mt in CY08) due to massive fall in steel demand from export markets due to global recession.

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