Commenting on Q1 FY 2020 volumes, Tata Steel announced that global business confidence has dipped sharply in recent months amidst broader economic weaknessand the uncertainty around the ongoing US-China trade conflict, which has had an adverse effect oninvestment decisions, capex spend and trade flows. Consequently, steel prices across manygeographies declined in 1QFY20. This coincided with a sharp rise in iron ore prices due to supplydisruptions and elevated coking coal costs. As a result, market spreads for steel producers globally havebeen affected.

In India, the liquidity issues in the NBFC and banking sector along with rural stress have negativelyimpacted sentiments and overall economic activities including domestic consumption. Despite this, TataSteel India's 1QFY20 production increased by 20%YoY with consolidation of Tata Steel BSL for the fullquarter and higher capacity utilization at both Tata Steel Standalone and Tata Steel BSL. 1QFY20 salesvolume 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 tradeflow uncertainty that is impacting steel consuming products. Tata Steel Europe's 1QFY20 production wasimpacted by planned shutdowns and unplanned outages during the quarter. This coupled with sluggishdemand affected the sales volume in 1QFY20.

The resumption of trade talks between U.S. and China and the recent Union Budget announcements inIndia to resolve some of the liquidity issues are expected to trigger an improvement in businesssentiment globally and in India. This is expected to translate into a stronger business performance insecond half of the financial year.


0 thoughts on “Tata Steel India records 20 growth in Q1FY20 production”

Post Comment

Daily News