The steel sector has seen listless growth of less than one per cent for FY14 as demand remained subdued in the domestic market, experts said. With a prolonged slowdown in auto, real estate and infrastructure sectors, demand continued at lower levels, resulting in very low growth in the fiscal.
According to the Joint Plant Committee report, the steel sector has witnessed only 0.6 per cent growth in the first 11 months of 2013-14. Demand remained low in the month of March, triggering price cut by steel companies much before the onset of the monsoon.
Sanjay Jain, analyst at Motilal Oswal, said that along with low demand from the domestic market, prices are also under pressure as prices of imported steel are falling due to softening of raw material prices globally.
Coal prices have declined by 10-20 per cent sequentially. Steel manufacturers are passing the benefit on to customers to boost sales. Thus imported price of steel has started declining in the country, forcing domestic players to take a price cut.
A senior official from JSW Steel said the company is contemplating a price cut up to Rs 1,000 per tonne. “We will take a final call soon but most likely prices will be cut by around Rs 500-1,000 per tonne.”
Other companies like Essar Steel and Kalyani Steel said they will take a call on prices this week.
Bhavesh Chauhan, analyst at Angel Broking, also spoke of the global downward trend. Usually, steel price correction starts with the monsoon but this year it is expected a couple of months ahead.
However, margins of steel companies will not be impacted significantly in the quarter despite the price cut since raw material prices have softened.
Jayanta Roy, senior vice-president and co-head, Corporate Sector Ratings, ICRA, said, “Over a longer term, volume growth would be critical, given that substantial fresh capacities are likely to be commissioned in the next two years. Unless demand conditions improve significantly, overall capacity utilisation levels and profitability of steel players would remain impacted”.
Icra expects domestic demand to grow at a slower pace in FY14 than the 3.3 per cent growth achieved in 2012-13, notwithstanding a typical pick-up in demand in the last quarter.
Tata Steel to sell TSIAL to Steel & Tube for NZ$28m
Tata Steel is selling its Australasian division Tata Steel International to New Zealand's Steel and Tube for cash consideration of NZ $27.5 million. The sale will take place on April 14, 2014.
Tata Steel International (Australasia), a division of Tata Steel, supplies stainless steel, engineering steel and composite floor decks to the New Zealand and Pacific Island markets. It is a service-oriented business providing local and international customers with a comprehensive supply chain management service for steel and associated products and services. Logistical and technical services are an integral part, the company says on its website. The division also offers ex-mill sales of colour-coated and packaging steels, railway tracks and structural sections.
Sanjay Jain, an analyst at Motilal Oswal, said, “Tata Steel may be selling off the Australian division because the cost of managing the business may be high.” Tata Steel, with a turnover of $24.82 billion in 2012-13, has over 80,000 employees across five continents.
Steel and Tube said that the acquisition was a strategic fit for the company. In a year when both companies celebrate their 60th year in business, the acquisition represents an important milestone for both of us. Together we are further strengthening our position as New Zealand’s leading steel distribution company, providing outstanding steel solutions to construction, manufacturing and rural businesses throughout the country,” said Steel and Tube, CEO, Dave Taylor.
TSIAL is an excellent strategic fit for Steel & Tube. Acquiring its established stainless and engineering steel distribution business, alongside its ComFlor manufacturing capability, will ensure continued growth under the long-established Steel & Tube brand, Taylor added. Steel & Tube is the leading supplier of steel products and services in New Zealand and is amongst New Zealand’s top 50 firms.
Established in 1907, Tata Steel Group is among the top 10 global steel companies with an annual crude steel capacity of over 29 million tonnes per annum. It is now the world's second-most geographically diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries.
These articles taken from mydigitalfc : http://www.mydigitalfc.com/government-finance/steel-demand-grows-lowest-4-years-06-fy14-641
http://www.mydigitalfc.com/news/tata-steel-sell-tsial-steel-tube-nz28m-639
According to the Joint Plant Committee report, the steel sector has witnessed only 0.6 per cent growth in the first 11 months of 2013-14. Demand remained low in the month of March, triggering price cut by steel companies much before the onset of the monsoon.
Sanjay Jain, analyst at Motilal Oswal, said that along with low demand from the domestic market, prices are also under pressure as prices of imported steel are falling due to softening of raw material prices globally.
Coal prices have declined by 10-20 per cent sequentially. Steel manufacturers are passing the benefit on to customers to boost sales. Thus imported price of steel has started declining in the country, forcing domestic players to take a price cut.
A senior official from JSW Steel said the company is contemplating a price cut up to Rs 1,000 per tonne. “We will take a final call soon but most likely prices will be cut by around Rs 500-1,000 per tonne.”
Other companies like Essar Steel and Kalyani Steel said they will take a call on prices this week.
Bhavesh Chauhan, analyst at Angel Broking, also spoke of the global downward trend. Usually, steel price correction starts with the monsoon but this year it is expected a couple of months ahead.
However, margins of steel companies will not be impacted significantly in the quarter despite the price cut since raw material prices have softened.
Jayanta Roy, senior vice-president and co-head, Corporate Sector Ratings, ICRA, said, “Over a longer term, volume growth would be critical, given that substantial fresh capacities are likely to be commissioned in the next two years. Unless demand conditions improve significantly, overall capacity utilisation levels and profitability of steel players would remain impacted”.
Icra expects domestic demand to grow at a slower pace in FY14 than the 3.3 per cent growth achieved in 2012-13, notwithstanding a typical pick-up in demand in the last quarter.
Tata Steel to sell TSIAL to Steel & Tube for NZ$28m
Tata Steel is selling its Australasian division Tata Steel International to New Zealand's Steel and Tube for cash consideration of NZ $27.5 million. The sale will take place on April 14, 2014.
Tata Steel International (Australasia), a division of Tata Steel, supplies stainless steel, engineering steel and composite floor decks to the New Zealand and Pacific Island markets. It is a service-oriented business providing local and international customers with a comprehensive supply chain management service for steel and associated products and services. Logistical and technical services are an integral part, the company says on its website. The division also offers ex-mill sales of colour-coated and packaging steels, railway tracks and structural sections.
Sanjay Jain, an analyst at Motilal Oswal, said, “Tata Steel may be selling off the Australian division because the cost of managing the business may be high.” Tata Steel, with a turnover of $24.82 billion in 2012-13, has over 80,000 employees across five continents.
Steel and Tube said that the acquisition was a strategic fit for the company. In a year when both companies celebrate their 60th year in business, the acquisition represents an important milestone for both of us. Together we are further strengthening our position as New Zealand’s leading steel distribution company, providing outstanding steel solutions to construction, manufacturing and rural businesses throughout the country,” said Steel and Tube, CEO, Dave Taylor.
TSIAL is an excellent strategic fit for Steel & Tube. Acquiring its established stainless and engineering steel distribution business, alongside its ComFlor manufacturing capability, will ensure continued growth under the long-established Steel & Tube brand, Taylor added. Steel & Tube is the leading supplier of steel products and services in New Zealand and is amongst New Zealand’s top 50 firms.
Established in 1907, Tata Steel Group is among the top 10 global steel companies with an annual crude steel capacity of over 29 million tonnes per annum. It is now the world's second-most geographically diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries.
These articles taken from mydigitalfc : http://www.mydigitalfc.com/government-finance/steel-demand-grows-lowest-4-years-06-fy14-641
http://www.mydigitalfc.com/news/tata-steel-sell-tsial-steel-tube-nz28m-639
