Economic downturn likely to be dark: Steel demand growth slows to a three-year low

Mumbai, Ta. August 26, 2019, Monday

The demand for steel in India is likely to remain at a three-year low as the economic downturn is likely to get darker. In the current financial year, the country's steel demand is likely to grow at less than 5%, a rating agency said.

During the year ended March 1, steel consumption increased by 8.5 percent. Then the current money is expected to grow at the slowest end of the year. Earlier, the rating agency was expecting a growth rate of 3 to 5 percent, but given the current situation, the growth estimate of 5 percent was too high, the agency sources said.

India's steel companies are thriving in the current year. Tata Steel's June quarter profit fell to more than two years, while JSW Steel's profits also dropped significantly.

In India, financing and economic growth rate in the NBFC sector, which have fallen below five years, have also affected the consumption of steel. The BSE metal index has fallen more than 5 percent this year, the highest decline in the 8 regional index on the BSE. The steel company's stock price has dropped significantly.

The demand for cars in the country has dropped to 20 years and the demand for steel in the sector is still lower than four years because of the steel demand.

Steel consumption in India is advocating to exceed global consumption growth. Global consumption of steel is projected to grow by 8.5 percent in the current year. It is important for the government to increase capital expenditure as private sector expenditures reduce costs.