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Sales improve 16% in the first quarter: Tata Steel

Production in the first quarter went up 20 per cent to 4.37 million tonne (mt), the company said.

, ET Bureau|
Jul 15, 2019, 05.54 PM IST
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However, Tata Steel Europe saw production decline by 5.3 per cent.
Tata Steel India said its sales in the first quarter of FY20 improved 16 per cent to 3.87 million tonne over the previous year even as liquidity issues and rural stress that impacted domestic consumption, primarily with consolidation of Tata Steel Bhushan Steel (BSL) for the full quarter.

Production went up 20 per cent to 4.37 million tonne (mt) in the Q1 against 3.64 mt with consolidation of Tata Steel BSL for the full quarter due to higher capacity utilisation at both Tata Steel standalone and Tata Steel BSL.

However, Tata Steel Europe saw production decline by 5.3 per cent to 2.66 mt in the first quarter against 2.81 mt in the same quarter last fiscal due to ‘planned shutdowns and unplanned outages.’ Sales went down 7.3 per cent to 2.27 mt in the quarter under review compared to 2.45 mt in Q1FY19.

“In Europe, the steel industry is facing significant headwinds in terms of lower economic growth and trade flow uncertainty that is impacting steel consuming products. This coupled with sluggish demand affected the sales volume in 1QFY20,” an official statement said.

Global business confidence has dipped sharply in recent months amidst broader economic weakness and the uncertainty around the ongoing US-China trade conflict, which has had an adverse effect on investment decisions, capex spend and trade flows, the company said.

Consequently, steel prices across many geographies declined in the first quarter. Input costs too have spiked with a sharp rise in iron ore prices due to supply disruptions and elevated coking coal costs. “As a result, market spreads for steel producers globally have been affected,” the statement said.

The resumption of trade talks between U.S. and China and the recent union budget announcements in India to resolve some of the liquidity issues are expected to trigger an improvement in business sentiment Tata Steel said, adding this is expected to translate into a stronger business performance in second half of the financial year.
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