Tata Steel India: Production increased by 20% y/y in first quarter of fiscal year
by David Fleschen
Global business confidence has dipped sharply in recent months amidst broader economic weakness and the uncertainty around the ongoing US -China tradeconflict, which has had an adverse effect on investmentd ecisions, capex spend and trade flows.
Consequently, steel prices across many geographies declined in 1QFY20. This coincided with a sharp rise in iron ore prices due to supply disruptions and elevated coking coal costs. As a result, market spreads for steel producers globally have been affected, concludes Tata Steel in an offical statemente.
In India, the liquidity issues in the NBFC and banking sectoralong with rural stress have negatively impacted sentiments and overall economic activities including domestic consumption. Despite this, Tata Steel India’s 1QFY20 production increased by 20%YoY with consolidation of Tata Steel BSL for the full quarter
and higher capacity utilization at both Tata Steel Standalone and Tata Steel BSL. 1QFY20 sales volume improved by 16%YoY primarily with consolidation of Tata Steel BSL for full quarter.
In Europe, the steel industry is facing significant headwinds in terms of lower economic growth and trade flow uncertainty that is impacting steel consuming products. Tata Steel Europe’s 1QFY20 production was impacted by planned shutdowns and unplanned outages during the quarter. This coupled with sluggish
demand affected the sales volume in 1QFY20.
The resumption of trade talks between U.S. and China and the recent Union Budget announcements in India to resolve some of the liquidity issues are expected to trigger an improvement in business sentiment globally and in India. This is expected to translate into a stronger business performance in second half of the financial year, says Tata.
Source: Tata Steel, Photo: Fotolia