Tata Steel BSL forecasts India’s steel demand to contract by 15-20pc to 80-85mn mt in FY2021 as the country’s economy grows at a slow rate of 1-2pc in the fiscal. For this assumption, the company expects construction and manufacturing activities to resume back to normal levels by June end. If the pandemic continues to impact economic activity through the year, the steel demand could be impacted by as much as 35-40pc with demand from major steel consuming sectors such as auto and construction likely to remain subdued through FY2021, according to Tata Steel’s annual report.
*With a steady rural economy, supported by high agricultural output, the roofing segment is expected to recover fast.
* Healthcare infra spending is expected to remain high post-pandemic, creating demand for pre-engineered building (PEB) products for use in hospitals, isolation facilities and expansion of government infrastructure.
* Oil and Gas pipeline network for city gas distribution and new cross country pipeline projects are expects to boost strong demand.
* Demand from renewable energy is expected to be robust amid government push for the sector, packaging and container segment demand is expected to be stable with increased exports
* Consumer durables and appliance sectors are expected to decline and slow recovery is anticipated in Q2-Q3 post monsoon.
* New launches in automotive sector are expected to be delayed due to negative market sentiments
In FY2020, Tata Steel BSL’s production rose by 7.33pc to 4.47mn mt from the prior year while sales increased by 2.22pc to 4.14mn mt. For the year, the company posted a net loss of Rs6.49bn ($88.12mn) compared to a net profit of Rs17.13bn in the prior year. In Q1 FY2021, Tata Steel BSL recorded a net loss of Rs6.58bn compared to a net profit of Rs1.1bn in Q1 FY2020 as the company’s sales volume dropped by 20pc in the quarter.