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Tata Steel reports higher production, sales in India despite liquidity challenges in market.

Summary: Mumbai (Maharashtra) [India], July 15 (ANI): Tata Steel India's first quarter production increased by 20 per cent year-on-year with consolidation of Tata Steel BSL for the full quarter and higher capacity utilisation at both Tata Steel standalone and Tata Steel BSL.

Mumbai (Maharashtra) [India], July 15 (ANI): Tata Steel India's first quarter production increased by 20 per cent year-on-year with consolidation of Tata Steel BSL for the full quarter and higher capacity utilisation at both Tata Steel standalone and Tata Steel BSL.

Q1 (April to June) FY 2019-20 sales volume improved by 16 per cent year-on-year primarily with consolidation of Tata Steel BSL for full quarter. While the production was 3.64 million tonnes, the sales totalled 3.34 million tonnes in the same period.

This was despite liquidity issues in the banking and non-banking financial companies (NBFC) sectors along with rural stress which negatively impacted sentiments and overall economic activities, including domestic consumption.

"The resumption of trade talks between the United States 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," the company said in a statement. "This is expected to translate into a stronger business performance in second half of the financial year."

In Europe, the steel industry has been facing significant headwinds in terms of lower economic growth and trade flow uncertainty that is impacting steel consuming products. Tata Steel Europe's first quarter FY20 production was impacted by planned shutdowns and unplanned outages during the quarter.

This coupled with sluggish demand affected the sales volume. While the production was 2.81 million tonnes, sales totalled 2.45 per cent.

In southeast Asia, the production was 0.52 million tonnes while sales totalled 0.6 million tonnes.

"Global business confidence has dipped sharply in recent months amid broader economic weakness and the uncertainty around the ongoing US-China trade conflict, which has had an adverse effect on investment decisions, capex spend and trade flows," the company said.

"Consequently, steel prices across many geographies declined in Q1 FY20. 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."

Tata Steel group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum The group (excluding southeast Asia operations) recorded a consolidated turnover of 22.67 billion dollars in the financial year ending March 31.

Last year, Tata Steel acquired Bhushan Steel Ltd which has now been renamed as Tata Steel BSL Ltd.

(ANI)

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Publication:Asian News International
Article Type:Financial report
Geographic Code:9INDI
Date:Jul 15, 2019
Words:459
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