Steel industry witnessed an increase in demand during the first quarter of Financial Year 09, indicating signs of recovery in the market. The domestic market consumed 12.83 million tonnes of steel, against 12.2 million tonnes in Q1 last year; reporting an increase of 5.2%. Finished steel production surged to 13.98 million tonnes during April- June 09, against 13.53 million tonnes during the same quarter last year, according to figures provided by the Steel Ministry.

However, exports declined 37.8% to 0.642 million tonnes from 1.032 million tonnes, apparently due to low demand of steel, under the impact of global slowdown. Imports too fell 5.3 per cent to 1.414 million tonnes during the first quarter.

An official from a steel manufacturing industry said: "Exports have taken a major hit but that has been compensated by good domestic demand, especially from the rural sector. With the government's increased spending on infrastructure, we are hopeful that steel demand won't peter out anytime soon."

Steel of Steel Authority of India Limited (SAIL) posted a 3.73 per cent rise in saleable steel production that stood at 30.6 lakh tonnes up to June 2009, due to revival of demand in the automobile sector and infrastructural activities. RINL too reported a 2.09 per cent increase in finished steel production that stood at 6.85 lakh tonnes from last year figures of 6.71 lakh tonnes.