Tata Steel reported a four percent drop in domestic sales to 4.14 million tonnes in the third quarter from 4.32 million tonnes recorded in the same period last year.
Steel production at the company rose to 4.50 million tons, the company said in a statement on Thursday.
Tata Steel reported that overall economic activity in India weakened further in the third quarter, reflected in low investment sentiment and lower demand. Moreover, the seasonal monsoon season affected the overall demand for steel.
The government announced various measures to stimulate economic activity and market sentiment. However, the benefits of this in terms of new private investment and improved domestic consumption can only potentially emerge in the longer term. The recent rate cut by the National Bank of India is a welcome move to improve liquidity, although the transmission of the rate cut is not clear and therefore the credit rating has not yet been increased, the report said.
However, as the monsoon season draws to a close and the holiday season begins, improved sentiment is expected to spur consumption and demand for steel.
Tata Steel said that confidence in global business remained weak in the second quarter of FY20 as weaker economic activity and continued uncertainty over trade conflicts affected investment decisions and trade flows.
The adaptive monetary policy stance in key advanced and emerging economies has yet to show any noticeable impact on economic activity levels. Consequently, the apparent demand for steel remained weak, which affected steel prices in different regions.
While regional spreads have begun to improve since mid-July from their lows in June due to lower coking coal and iron ore prices, significant gains will only seep into the next few quarters. p>
In Europe, the steel industry continued to face significant obstacles amid lower demand due to Brexit uncertainty and trade conflicts.
