Tata Steel sees domestic demand at 5-6% this fiscal
Mumbai: Demand for steel in India is likely to be 5-6 per cent in the current financial year, while in the global market it will be 2.5-3 per cent, a top player in the sector said on Tuesday.
"The US demand growth is very marginal...China is not growing as much as it used to be. The domestic growth rate is also not strong. Gobal growth rate for steel will probably be around 2.5-3 per cent," Tata Steel Vice-Chairman B Muthuraman said told reporters on the sidelines of a CII event here.
"Domestic steel demand will be around 5-6 per cent," he added.
Requirement for the alloy around the globe has been subdued in recent time on the back of economic recession in many Western economies. However, things are likely to improve on the back of slow but steady revival in global economy.
On Tata Steel's European operations, Muthuraman said the firm's unit in the region, where it entered in 2007, have improved on the back of a slew of efficiency enhancement measures taken in recent times.
The private steelmaker's upcoming Kalinganagar unit in Odisha will be operational by the end of next year, he said.
"Kalinganagar unit will go on-stream by the end of 2014," Muthuraman said, adding it will help improve both cash flow as well as operating margins.
On Tata Steel's debt, which is one of the highest in the sector, he said "debt has to be seen with respect to the cash we generate. Our profitability from domestic operations has been good. If we get this 3 million tonne plant (at Kalinganagar), that will add to the cash and EBIDTA margin of the company."
Allaying fears of possibility of over-capacity in the next three years in the domestic market, he said: "steel demand is likely to grow at 6-10 per cent in the next 30 years for which we need capacity addition."
"India's problem is not demand but addition of fresh capacity," Muthuraman added.