Companies

Tata Steel output down 34% as Covid-19 takes a toll

Our Bureau. Mumbai | Updated on July 09, 2020 Published on July 09, 2020

Tata Steel reported on Thursday that its production was down 34 per cent in the June quarter to 2.99 million tonnes (mt), against 4.50 mt logged in the same period last year, due to weak demand amid the Covid-19 pandemic.

Sales volume was down 26 per cent at 2.92 mt (3.96 mt) as most leading corporates cut down on their infrastructure spending.

Overall production and sales volumes were lower due to mobility restrictions, as the pandemic hit industrial activity and consumer sentiment across all geographies, said Tata Steel in a statement.

In India, it said, capacity utilisation of upstream facilities was adjusted to about the 50 per cent level in April while downstream units were closed.

With the phased opening of the economy, utilisation levels were ramped up gradually to about 80 per cent by June-end. Downstream facilities were also restarted and are being ramped up progressively, said the company.

To counter the closure of the Indian markets in April and May, exports were ramped up significantly by tapping new markets which constituted about 50 per cent of the total sales volume in the June quarter.

While April and May sales were lower, it improved significantly in June as economic activity resumed in India. With an improvement in domestic demand, the proportion of sales in India will increase in the September quarter, said the statement.

The company’s steel production in Europe was down 19 per cent at 2.14 mt (2.65 mt) while sales dipped 14 per cent to 1.94 mt (2.26 mt).

Though Europe did not impose a complete lockdown, the macroeconomy was impacted by the Covid outbreak. Production levels in Europe were scaled down to about 70 per cent. Key steel consuming sectors such as automotive and construction sector continue to be under pressure though the demand for packaging material has been robust, said the company statement.

 

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Published on July 09, 2020
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