India's steel demand in April fell dramatically after the nationwide Covid-19 lockdown shut down key consumers.

Indian steel demand fell to 699,000t in April from 7.69mn t a year earlier, according to latest steel ministry preliminary estimates. It was also down by 90pc from a revised 6.74mn t for March demand.

April crude steel output dropped by 69.5pc to 2.75mn t and finished steel output fell by 84.6pc to 1.34mn t from a year earlier.

India's nationwide lockdown that started on 25 March and has been extended to 31 May has halted supply chains and led to staffing shortages, halting steel demand from sectors including construction, auto producers, consumer durables and steel processors.

"We missed the peak demand season this year, during the summer [March-May] due to the lockdown," a Mumbai trader said. Construction and infrastructure building in India intensifies during the summer ahead of monsoon season that runs from June to September. Construction accounts for 60pc of the country's steel demand.

Most main steel producers including JSW Steel, Tata Steel and Sail were operating at only 30-50pc capacity utilisation during the lockdown.

"Given the current uncertain demand environment, which could potentially extend for the entire first half of the year ending March 2021, end users would not be in a rush to place large orders to steel mills even after the withdrawal of the lockdown," according to a report by domestic research agency Icra Research. Domestic steel demand will gradually return to pre-Covid-19 levels only after October, provided the lockdown is not extended any further, Icra said.

India's April steel exports fell by 16.8pc from a year earlier to 429,000t, as port operations also slowed during the month. Imports fell by 34.3pc to 407,000t.

State-owned mining firm NMDC's iron ore sales in April fell by 49pc to 1.38mn t and its output fell by 38pc, prompting it to cut May prices to the lowest levels since 2016.