Declining Domestic Demand is a Worry
Exports are holding up well and set to inch up even further. However, domestic steel consumption declined due to the slowdown in economic activities.
While the steel market would want to make up for soft domestic sentiments by increasing exports, the production is suffering due to the lack of oxygen supply. The government has currently restricted the supply of oxygen for industrial activities and diverted the stock of liquid oxygen for medical purposes only.
The steel ministry had recently informed that oxygen stocks at steel plants have reduced to just half a day from 3½ days earlier, with the majority of stock diverted towards medical use.
Oxygen is crucial for steel plants, primarily in blast furnaces and other processes like lancing and gas cutting. The shortage of oxygen supply has badly impacted steel production. And the industry could very well miss out on fulfilling the space that China has vacated.
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