Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Moody’s has begun a review of its Ba2 ratings for JSW Steel’s corporate family rating (CFR) and the Ba2 senior unsecured rating, according to media reports. The move comes on the back of COVID-19 outbreak and the resulting uncertainty in the finished steel markets. These uncertainties and volatility in steel prices have left JSW vulnerable to negative market sentiment, according to Moody’s.


Moody’s said a setback to the economy, narrow spreads and sluggish demand after the containment of the COVID-19 outbreak could downgrade JSW’s credit profile. The company had curtailed production after India adopted lockdown measures to contain the spread of the virus.


For the December quarter (Q3FY2020) reported 88pc decline in net profit at Rs1.87bn from the prior-year period. On the operational side, crude steel production in FY2020 declined by 4pc to 16.69mn mt from FY2019. 


Moody’s downgrade review would focus on the impact of movement restrictions on JSW’s operations; demand for steel, its prices and product spreads; government support for steelmaker’s operations and consumers in main markets among other things. 

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