Weak Realty Demand Affects Cement & Steel Sectors
Fitch Ratings expects weak property demand and a sluggish construction cycle to cause cement consumption to drop by more than 15% in the financial year ending March 2021 (FY21), as more than 65% of India’s cement demand is driven by the housing segment. This is despite more resilient demand from the infrastructure, rural housing and repair works sectors. Meanwhile, steel demand is likely to fall by around 10%, also affected by the weak outlook for property development. Steel producers that focus on long steel products for construction, such as bars, wires and beams, tend to be small in scale and less efficient; we expect these producers to see a larger drop in volume than for larger steel manufacturers.
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