With the steel industry witnessing a torrid three months between October-December last year, the government on Thursday said there was no revision of expansion plans of state-run steel major Steel Authority of India Ltd adding that the worst was over for the sector.
“Steel is a cyclical industry and the current slowdown is just a temporary phase,” said PK Rastogi, secretary, ministry of steel. “SAIL’s expansion plans were drawn up keeping in mind the long-term needs of the economy and there is no change in plans.”
In a meeting that lasted over two hours, Steel Minister Ramvilas Paswan alongwith Rastogi reviewed the progress of the PSU’s expansion on Thursday and expressed confidence that the worst was over for the sector. SAIL is investing Rs 54,000 crore towards capacity expansion that would take its steel capacity to 26.2 million tonnes from the current 15 million tonnes by 2010.
“The slump in demand has bottomed out and I don’t forsee any further slowdown,” Rastogi said. “Prices have also come down appreciably from last year and are not likely to fall any further. Demand is bound to grow as the current lull is more due to global recession. Had it been more intrinsic to our economy we would have been more worried.”
Both SAIL and Tata Steel had reported a 56 per cent fall in net profit for the third quarter of the current fiscal while Sajjan Jindal’s JSW Steel posted a net loss of Rs 128 crore. Only Jindal Steel and Power Ltd owned by Navin Jindal bucked the trend by posting a 29 per cent jump in net profit from its operations in the iron and steel sector.