Tata and JSW Steel,Production and Sales volumes reflect pain for Steel Industry

Two of the biggest players Tata Steel and JSW Steel both recorded subdued numbers

The production and sales numbers of steel companies have brought to fore the pain the sector is going through, with the economic slowdown dampening demand from key clients.

Two of the biggest players Tata Steel and JSW Steel both recorded subdued numbers, be it in production or sales in the second quarter of the financial year.

“The production was lower due to prolonged severe monsoon in general and fall in demand from auto sector in particular,” JSW Steel said in a statement.

In an earlier interview, the company’s Jt Managing Director & Group CFO Seshagiri Rao had said that the economic slowdown has dampened demand from clients in infrastructure and auto sectors.

JSW Steel’s production in the second quarter dropped by 8 percent from a year earlier, to 3.84 million tons. For the six months of the financial year, the numbers fell, by 3 percent to 8.08 million tons.

Almost similar has been the case with Tata Steel. The company’s numbers have got a boost from the addition of the capacity from the erstwhile Bhushan Steel, which is now called Tata Steel BSL.

Overall, the company’s production was marginally higher at 4.5 million tons, compared to 4.3 million tons a year ago.

“During the quarter, lower volumes to automotive segment were compensated by higher exports while deliveries in branded products and retail segment and industrial product and projects segments were maintained.

Tata Steel India’s crude steel production was flat on QoQ basis,” said the company in a statement.

“A production cut could be the answer. If not in this quarter, in the next quarter we could see a big cut in supply, all the variables remaining the same,” Rao had said in the earlier interview.

While auto industry is seeing one of its worst slumps, a lag in government spending in the infrastructure space has hurt demand for steel.

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