Mobility paves Samsung’s silver path
The Korean giant’s early bet on mobile phones helped it hit the $10-bn mark in India, but in its 25th year it ...
The profitability of steel companies is expected to take a severe hit this fiscal, with slowing domestic demand and a challenging external environment.
Official statistics indicate that the domestic steel consumption growth had weakened to 3.5 per cent in July from 6.4 per cent in June, and this is expected fall further, putting pressure on steel companies profitability in September-quarter, said an ICRA study.
Operating profit margins of the domestic steel industry have been on a slippery ground, declining steadily to 18.2 per cent in the June-quarter, from 22.6 per cent logged in same quarter last year.
According to the ICRA report, the downward trend in profitability for steel companies is expected to continue as their margins get further squeezed between falling domestic steel consumption and a weak outlook for global growth, amid escalating trade war-related tensions.
Jayanta Roy, Senior Vice-President & Group Head, ICRA, said that steel prices have been retreating southwards across most steel consuming hubs globally.
Chinese hot rolled coil (HRC) spot export offers declined by about 13 per cent since April. Spot HRC prices by August-end hovered at about $462 a tonne, a level last seen when much of the industry was in distress in June 2017.
“Not surprisingly, the steel spreads have witnessed a significant contraction to last fiscal level. Unless steelmakers are able to supplement weak margins with higher sale volumes, a decline in industry earnings over last fiscal is a given,” he said.
Surprising most market participants, the Indian GDP growth fell to an over six-year low of 5 per cent in June-quarter of this fiscal.
On the positive side, seaborne coking coal spot prices dipped 25 per cent between May and August. The benefit of price drop is expected to fully flow in the margins of domestic steelmakers from third quarter.
ICRA’s analysis suggests that the steel spreads for a domestic blast furnace-based flat steel producer in the September quarter is expected to be sequentially weaker by about $25-30 a tonne over June quarter. However, the benefit derived from lower coking coal consumption cost is expected to sequentially increase spreads by $35-40 a tonne in the third quarter.
The Korean giant’s early bet on mobile phones helped it hit the $10-bn mark in India, but in its 25th year it ...
Antrix should adopt a different tactic than merely fighting over jurisdiction: Experts
Invest in relationships, enterprise, behaviour, effort and learning
From different types of osmoses to new membranes, researchers have come up with ways of drawing water
What filters should you apply when mining for under-the-radar small-cap stocks? Read on to find more
There’s no reason to bail out of your fund as long as it’s matching the category average
Amid choppiness, the benchmark indices slipped marginally; approach the week with caution
SBI Cards (₹1,032.7): Witnesses fresh breakoutBetween September and December last year, the stock of SBI Cards ...
That weekend came the news that Champa’s elder daughter was engaged, the proof arriving in the form of Jaimini ...
“Amma,” Divya yelled from the bathroom. “There’s something in my teeth.”Balakrishnan and Veena froze and ...
What makes the new crop of young Indian cricketers such game-changing winners? Over and above their talent, ...
For their dead, Parsis practise a 3,000-year-old system where corpses are excarnated in the Tower of Silence, ...
Digital is becoming dominant media, but are companies and their ad agencies transforming fast enough to make a ...
Slow Network, promoted by journalist-lyricist Neelesh Misra, pushes rural products and experiences
How marketers can use the traditional exchange of festive wishes meaningfully
For Fortune, a brand celebrating its 20th anniversary, it was a rude shock to become the butt of social media ...
Three years after its inception, compliance with GST procedures remains a headache for exporters, job workers ...
Corporate social responsibility (CSR) initiatives of companies are altering the prospects for wooden toys of ...
Aequs Aerospace to create space for large-scale manufacture of toys at Koppal
And it has every reason to smile. Covid-19 has triggered a consumer shift towards branded products as ...
Please Email the Editor