ICRA Upgrades Indian Steel Sector Outlook

Rating agency ICRA 14 upgraded its outlook for the Indian steel sector to stable on the back of improving demand and prices. Icra had earlier this year revised its outlook for the sector to negative from stable. Icra said steel sector outlook upgraded to stable from n

BY Realty Plus
Published - Wednesday, 16 Dec, 2020

ICRA Upgrades Indian Steel Sector Outlook

Rating agency ICRA 14 upgraded its outlook for the Indian steel sector to stable on the back of improving demand and prices. Icra had earlier this year revised its outlook for the sector to negative from stable. Icra said steel sector outlook upgraded to stable from negative on the back of improving demand and prices. The domestic steel sector has witnessed a strong revival in second quarter of 2020-21, it said. This, Icra said, is result of a combination of factors like a strong retail demand emanating from a thriving rural economy, and green shoots of recovery in white goods and the automobile sector, especially from tractors, passenger vehicles and two-wheelers. The cumulative domestic steel demand in October-November has already surpassed the pre-COVID-19 levels. The revival in demand has been surprising, and the steel industry's ability to claw back to the pre-COVID-19 levels of demand within six months of a global pandemic outbreak has been remarkable. Consequently, ICRA revised its 2020-21 steel demand forecast to a contraction of around 12 per cent, compared to initial forecast of 23 per cent contraction made in April 2020. The sector outlook is also revised to stable from negative. On production, ICRA said the share of top six steel producers in total crude steel production, which remained at about 55 per cent historically, has also risen to about 65 per cent in recent months.