Tata Steel reports consolidated financial results for Q2 2019
by David Fleschen
During the quarter, steel prices across geographies declined with weakening economic activities and uncertainty around the ongoing US-China trade conflict. This coincided with a sharp rise in iron ore prices due to supply disruptionsand elevated coking coal costs. As a result, steel spreads dropped by around US$ 80-100/ton in Tata´s key markets.
In India, steel prices declined as subdued economic activity, seasonal slowdown and liquidity issues weighed on domestic consumption. Higher net imports
further exacerbated the demand supply balance. In Europe, the steel industry faces significant headwinds in terms of lower economic growth, uncertainty around Brexit and the trade conflict. This coupled with rising share of imports and elevated raw material prices has led to a sharp decline in steel spreads. In this business environment, the company has delivered a11%YoY volume growth for production and 5%YoY for deliveries.
India steel production grew by 23 % YoY to 4.50 mn tons in 1QFY20 with consolidation of Tata Steel BSL for the full quarter and higher capacity utilization at both TataSteel Standalone and Tata Steel BSL. India steel deliveries jumped 19% YoY to 3.96 mn tons in 1QFY20 as slowdown in the automotive sector was countered by higher sales in other segments.
During the quarter, Tata Steel Europe liquid steel production was impacted by planned shutdowns and unplanned outages. This coupled with sluggish demand adversely impacted delivery volumes. Tata Steel Europe continues to strengthen its sales mix. It launched three new products during the quarter; higher-value differentiated product sales exceeded 39%.
Source: Tata Steel, Photo: Fotolia