Tata Steel looks away from Covid-19 hit China to source inputs
Category: #headlines |   By Hrishikesh Kadam |   Date: 2020-03-09  | 
  • Share
  • Twitter
  • Facebook
  • LinkedIn

Tata Steel looks away from Covid-19 hit China to source inputs

It looks like Indian steel major Tata Steel is tapping alternative supply sources in Brazil and Turkey for production inputs. The decision seems to be a part of the global trend whereby industries are aiming to de-risk their supply chains from China.

In the wake of the Covid-19 outbreak, Tata Steel has reportedly announced its decision to minimize its dependence on China for some key consumables including manganese, electrodes and rolls for steel mills, and refractory products and compounds.

As per reliable sources, the de-risking initially began with the US-China trade war and later gained momentum due to the coronavirus outbreak.

Tata Steel had reviewed the coronavirus situation in China in the initial weeks, stated CEO TV Narendran, adding that while the company does not rely on China for steel, it does sources some of its consumables from China.

While the Covid-19 situation is expected to play out for several weeks, Tata Steel is comfortable with its supplies until April, Narendran noted.

The additional cost of switching to new suppliers from existing authorized ones could possibly be offset by the cost of any potential interruption in supplies of key consumables since they do not constitute for a substantial fraction of steelmaking costs.

The only major concern for the steel industry, according to Narendran, is the buildup of about 20-30 million tonnes of inventory in China following the virus outbreak. He believes that the output could find its way into international markets.

Apparently, the impact is being felt more in Southeast Asian countries, where prices are already facing immense pressure. However, the impact is considerably less in Europe, except in Italy, where it is a concern. Germany is stable.

Also read: Uber, Lyft circulate coronavirus prevention guidelines among drivers

Tata Steel said it has witnessed considerable acceleration in construction of commercial and industrial infrastructure, particularly warehouses, post the implementation of GST (goods and services tax).

The construction of residential buildings continues to remain shaky, which could improve with the step-up improvement in affordable housing.

However, there is yet to be any recovery in the domestic auto industry, a major driver for the steel industry as autos make up for nearly 15% of the steel demand, Narendran mentioned.

With local activity coming up from a low base, India remains comparatively less affected.

 

Source credits: https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/covid-19-impact-tata-steel-to-cut-china-dependence-for-key-inputs/articleshow/74541342.cms

  • share
  • Twitter
  • Facebook
  • LinkedIn


About Author

Hrishikesh Kadam    

Hrishikesh Kadam

A graduate in electronics and telecommunication engineering, Hrishikesh Kadam has always found writing fascinating. Driven by a never-ending passion for content creation combined with a bit of experience in writing personal blogs, Hrishikesh blends his technical knowl...

Read More

More News By Hrishikesh Kadam

IndiGo strengthens its position in India; eyes international markets
IndiGo strengthens its position in India; eyes international markets
By Hrishikesh Kadam

According to reliable sources, India’s low-cost airline company IndiGo has lately emerged to be one of the key players in the airline industry in terms of capacity. Aided by a rapid recovery in the domestic aviation market amidst the ongoing CO...

U.S. urges Australia to ditch laws that make media giants pay for news
U.S. urges Australia to ditch laws that make media giants pay for news
By Hrishikesh Kadam

Latest in the series of events, the United States has come forward in full support for media colossuses Facebook Inc. and Google LLC. Reportedly, the U.S. government has urged the Australian authorities to reconsider their proposed law, wherein the t...

OneWeb raises USD 1.4 billion; Hughes and SoftBank lead investors
OneWeb raises USD 1.4 billion; Hughes and SoftBank lead investors
By Hrishikesh Kadam

According to reliable sources, London-based multinational broadband satellite operator OneWeb has reportedly raised USD 1.4 billion in a funding round led by Hughes Network Systems LLC and SoftBank Group Corporation. The fresh investments will allow ...