The Indian economy is showing signs of a major slowdown, led by poor manufacturing growth, high unemployment and an 18-year low in sales of new cars. The automotive sector is under severe pressure and the ripple effect is impacting all domestic industries that supply steel and other raw materials to this sector.
The Indian government has taken a series of steps to restore investor confidence and also to boost the economy. The most debated measure is a reduction in the corporate tax rate from 30% to 22%. There is also serious talk of a steel recycling policy being formulated in the near future that will deal with end-of-life vehicle recycling; the hope is that such a policy will provide a boost to employment, manufacturing and new car sales.
Internationally, the finished steel and ferrous scrap markets have remained under pressure over the last four to six weeks and no-one is quite sure where the “real” bottom is. Such extreme volatility in demand and pricing is a reminder of current challenges. The hope must be that stability and some level of predictability return as soon as possible.
Nathani Group of Companies (IND), Vice-President of the BIR Ferrous Division