Steel Re-Rolling Mills Expect Demand Revival After Monsoon

6 July 2016

Bhavnagar-based steel re-rolling mills, that are going through a slump with almost 30 per cent dip in demand, hope for a revival post monsoons.The industry feels that with the government promoting affordable housing schemes, demand for re-rolled steel would rise around Diwali.

The industry is currently operating at 70 per cent utilisation of processing plants, and hopes that would be able to achieve full capacity utilisation by the year-end.

Moreover, upcoming government's infrastructure projects too will support the industry to come out of recession. Infrastructure, real estate and construction sectors are the key markets for TMT (Thermo Mechanically Treated) bars, MS (Mild Steel) channel angles and sections manufactured by these re-rolling mills.

"We are expecting that real estate sector will revive after this monsoon and fresh demand for re-rolling steel will increase. Moreover, government promoted affordable housing schemes will also generate demand post Diwali this year," said Haresh Patel, president of Sihor Steel Re-rolling Mills' Association.

A year back the industry was in deep recession due to dull demand of recycled steel products and less availability of first grade steel for recycling. However, after January this year, number of ships arriving at Alang for melting which increase the supply of first grade steel and demand for MS channel angles and sections have grown.

Sihor used to produce about 100,000 tonnes finished steel products per month couple of years back, which has come down to 70,000 tonnes per month now."

There are about 120 steel re-rolling mills in Gujarat, mainly located in Bhavnagar district. The industry provides employment to over 10,000 people. Most of the finished products including TMT bars, MS channel angles and sections manufactured by these re-rolling mills are consumed in real estate and infrastructure projects in Gujarat, Maharashtra and Rajasthan.


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