Challenging times ahead for Indian Steel players
The sharp rise in international coking coal prices besides an almost stagnant steel demand pose challenging times ahead for the domestic steel players, ratings agency ICRA said. Domestic steel demand remained largely stagnant in Q1 2016-17, with consumption growing by just 0.4 per cent year-on-year (y-o-y) during this period, ICRA said in a statement. "Cost pressures amidst weak demand signal challenging times ahead for domestic steel players," it added. "However, going forward, an anticipated slowdown in the real-estate sector on account of government's demonetisation drive will impact demand of long steel players in the immediate term," it said. ICRA Senior VP and Head (Corporate Ratings) Jayanta Roy said given that a majority of the small to medium-sized secondary steel players in India are positioned in the long product segment, impact of this slowdown in real estate demand is expected to affect their capacity utilisation levels.
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