Loss likely for steel industry worldwide
Source: Agencies/Shanghai Daily |
March 29, 2013, Friday
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THE global steel industry will probably suffer an overall loss this year because demand is not strong enough to boost prices, the vice president of Indian giant Tata Steel said yesterday.
Balasubramanian Muthuraman forecast on the sidelines of an Indian-Breton business forum in Rennes, Brittany, that Tata Steel India "will make good profits" before adding: "But it is not the case of the world steel industry."
Asked if he expected the global steel sector to suffer a loss, Muthuraman said simply: "Yes."
"Steel companies will probably find it difficult this year from the point of view of generating margins because the steel demand is not strong enough to pull steel prices up," he explained.
The Tata Steel executive also forecast continued consolidation in the steel sector, saying that concentration of companies "is a natural phenomenon, it will continue to happen. There are too many steel companies around the world."
Tata itself rose toward the top of the global rankings via its acquisition of Anglo-Dutch rival Corus in 2007.
Muthuraman predicted that many other Indian steel companies would turn a profit this year as well but underscored that "raw materials prices are high today, this doesn't leave enough margin for the steel companies and that situation will continue for maybe two or three years."
Tata Steel expects its own global output to gain 3 to 4 percent this year, owing mainly to demand from China, where he anticipated an overall production increase of 7 to 8 percent.
Balasubramanian Muthuraman forecast on the sidelines of an Indian-Breton business forum in Rennes, Brittany, that Tata Steel India "will make good profits" before adding: "But it is not the case of the world steel industry."
Asked if he expected the global steel sector to suffer a loss, Muthuraman said simply: "Yes."
"Steel companies will probably find it difficult this year from the point of view of generating margins because the steel demand is not strong enough to pull steel prices up," he explained.
The Tata Steel executive also forecast continued consolidation in the steel sector, saying that concentration of companies "is a natural phenomenon, it will continue to happen. There are too many steel companies around the world."
Tata itself rose toward the top of the global rankings via its acquisition of Anglo-Dutch rival Corus in 2007.
Muthuraman predicted that many other Indian steel companies would turn a profit this year as well but underscored that "raw materials prices are high today, this doesn't leave enough margin for the steel companies and that situation will continue for maybe two or three years."
Tata Steel expects its own global output to gain 3 to 4 percent this year, owing mainly to demand from China, where he anticipated an overall production increase of 7 to 8 percent.
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