InvestorQ : I am planning to buy steel companies like Tata Steel and JSW Steel for long term? What is your view on steel demand in the coming months?
Mitali Bhutta made post

I am planning to buy steel companies like Tata Steel and JSW Steel for long term? What is your view on steel demand in the coming months?

Answer
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Dawn Cherian answered.
5 months ago


Clearly, COVID-19 has taken its toll and the output is expected to be much lower this year. The Indian Steel Association has estimated that the steel demand in India is expected to contract by 7.7% in the year 2020. From the original demand estimate of 106.7 million tonnes, the ISA has now revised the steel demand down to 93.7 million tonnes for the calendar year. Most steel manufacturers have faced disruptions due to the lockdown and have suspended operations at their plants. Even after the production starts, it is likely to be phased and logistic challenges are likely to remain. The bigger problem is that steel is derived demand and it can really take off only after downstream industries like autos and FMCG really pick up. Auto is still disappointing. Most steel companies have also been facing postponements and cancellations of steel export orders. That has not been good news on the global front too.