Tata Steel’s production in Q1FY2021 fell by 33.5pc in India to 2.99mn mt and 19.24pc in Europe to 2.14mn mt from a year ago amid the lockdowns imposed to control the spread of COVID-19 pandemic. The economic impact of the COVID-19 lowered the company’s production and sales in the June quarter, according to provisional figures released by Tata Steel on Thursday.
Lower industrial activity and dampened consumer sentiments across geographies effect sales which dropped by 26.26pc from a year ago in India to 2.92mn mt and fell by 14pc to 1.94mn mt in Europe in Q1. Sales in South East Asia dipped to 0.42mn mt down by 32pc from the prior year quarter.
|Tata Steel’s Q1FY2021 steel production (mn mt)|
Tata Steel’s India steel production numbers include figures for Tata Steel BSL and Tata Steel Long Products. For India the company provides crude steel production, while for Europe the figures are for liquid steel and for South East Asia, it is saleable steel production.
Tata Steel India
In April, the company’s steel production capacity utilization was reduced to 50pc and downstream facilities were closed. Post the relaxation of lockdown restrictions, Tata Steel ramped up production gradually and utilization rates increased to around 80pc onward the end of June. Downstream units have restarted and are being ramped up in line with demand.
India business increased exports in April and May and entered new markets to mitigate the slump in domestic demand. The company exported 50pc of its total sales volume in Q1. Improved domestic demand is expect to increase domestic sales and replace export volumes in Q2. In the domestic market, retail sales in Q1 improved in the rural areas amid a slow recovery in the urban market.
Tata Steel Europe
The company’s Europe operations are banking on steel demand in the packaging sector. In Q1, production in Europe was cut to 70pc capacity utilization due to weak demand for auto and construction sectors.