Indian steel sector Consolidation to Continue in 2020
According to Moody's Investors Service, consolidation in the Indian steel sector that began in 2018 will continue in 2020. "India will remain the world's second-largest steel producer behind China after having overtaken Japan in 2018. But new capacity additions will take a back seat with weak steel consumption hurting free-cash-flow generation in the current year," it said. Moody's estimates that lower GDP growth will translate into steel consumption falling at least 10 per cent for rated steel-makers in the 12 months to March 2021. This decline is largely driven by plummeting automaker demand, and weakness in construction, infrastructure and shipbuilding. "We assume that economic activity will begin to gradually pick up from July. However, given the possibility for second or third waves of virus infections or deeper economic costs than currently factored in, downside risk to these forecasts are significant," the agency said.
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