Moodys Forecast Notable Slowdown in India’s Steel Demand Growth

SEATTLE (Scrap Monster): The latest steel sector report published by Moody’s Investors Service predicts significant slowdown in India’s steel consumption growth in 2020-’21. The reduced growth forecast is much in line with the anticipated slower GDP growth rate in the country.

The domestic steel consumption in the country is expected to grow at the rate of 2.0-2.5% in fiscal year 2020-’21. This compares with the projected growth of 7.5% for 2019-’20. All the major steel consuming industries have come to a standstill, following imposition of nationwide lockdown to fight spread of the virus.

ALSO READ: Steel Imports Dipped for the First Time in 8 Months

The spread of the virus is likely to take toll on the Indian steelmaking industry. Many steelmakers have either idled or reduced production at their plants. The prevailing market uncertainties have forced many steelmakers to defer investments in steel plant expansions. According to Moody’s, the steel making industry is likely to take at least two quarters to return to normalcy. The profitability of companies is likely to remain under pressure until meaningful recovery in prices, it noted.

Moody’s report shares negative outlook for Asian region, mainly on account of falling demand and rising inventory levels in China.