New Delhi, April 8 (PTI): India's steel consumption grew by just 0.6% in 2013-14 fiscal, its lowest in four years, to 73.93 million tonnes (MT), mainly impacted by a slower expansion of the domestic economy and lower imports.

"India's real consumption of total finished steel was up by 0.6% year-on-year in April-March 2013-14 at 73.932 MT, impacted primarily by the slowdown in the domestic economy and a sharp decline in imports," Joint Plant Committee (JPC), a unit of the Steel Ministry, said in a report.

"The low growth rate in domestic steel consumption indicated that base level demand conditions continued to be weak during 2013-14," it said.

Construction sector accounts for around 60% of the country's total steel demand while the automobile industry consumes 15%. Both the sectors were plagued by a slowdown in the economy which according to the Central Statistics Office estimates grew by 4.9% in 2013-14, against the growth rate of 4.5% in 2012-13.

The previous fiscal was also not that impressive for the steel industry as well with consumption growing by a mere 3.3% on subdued demand due to slackening of the economy and high interest rates.

Steel consumption grew by 5.5% in 2011-12 and 9.9% in 2010-11, according to Joint Plant Committee. The consumption of steel depends on the growth of the economy. A sound economy ensures higher consumption. User industries such as construction and consumer durables had a bad run last fiscal resulting in dip in demand, an industry expert said.

"The demand for steel in March was not good either as it expanded by only 0.7% to 6.738 MT over March 2013, dampened by the impact of the slowdown and a 34.2% decline in imports during this period, which the decline in exports by 23.6% and a modest rise in production for sale (4.8%) could not outweigh," JPC said.

The month-on-month trends however, were different and saw real consumption go up by 10.2% in March 2014 over February 2014, encouraged primarily by a supply-side push as both productions for sale and imports recorded strong growth though exports also shoot up by 33.6%.

Tata Steel Managing Director T V Narendran recently said India's steel consumption is likely to grow by 5-6% in the current fiscal. However, his assumption is based on the projected 5-7% economic growth of the country.

"Typically, steel demand grows by 1.2 to 1.3% of the GDP growth. If the GDP growth is 5%, I am expecting demand should grow by 6%," he had told PTI in late March.

In the last two fiscals, this thumb rule did not materialise though.