Ratings agency ICRA on Wednesday said the country's steel consumption growth is likely to decelerate to six per cent in the current financial year, impacted by economic slowdown. The growth of domestic steel consumption was recorded at 7.9 per cent in the previous financial year, the rating agency said in a report.
However, the profitability of steelmakers may recover somewhat in the third quarter of 2019-20, with a sharp fall in prices of coking coal, key steel-making ingredient, in August 2019, and expectation of better demand from the construction sector during that quarter, it said.
"The domestic steel consumption growth is expected to decelerate to around 5 per cent-6 per cent in FY2020 as compared to 7.9 per cent in FY2019, on the back of an unprecedented slowdown in economic activity, as reflected by GDP (gross domestic product) growth tapering down to 5 per cent in Q1 FY2020," ICRA said in the report.
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