India’s domestic steel consumption will grow by a range of 2.0-2.5 percent in the fiscal year 2020-21, down from the 7.5 percent expected for 2019-20, a steel sector report by rating agency Moody’s Investors Service has indicated.
The estimate for India’s steel consumption in the current fiscal is in line with the country’s GDP growth. Moody’s has cut its GDP growth forecast for India for the fiscal year 2020-21 to 2.5 percent from the previous estimation of 5.3 percent. The spread of Covid-19 has led to a slowdown or even halt of all major steel consuming industries in late March-April. Though the nationwide lockdown is officially expected to be lifted on April 14, it will take from three to six months for the steelmaking industry to return to normal conditions, sources have told SteelOrbis. All major steel producers will have to postpone their expansion plans for about a year. At the same time, there are expectations that the virus-containing measures in India will be in place for a longer period.
Indian steel companies’ profits were high compared to their global peers in FY 2019-20. However, this year profitability is expected to decline, Moody’s said.