COVID-19 impact: Steel demand to nosedive significantly in FY21, says N Chandrasekaran

Post time: 2020-07-26

Steel demand is expected to decline significantly in 2020-21 in line with a projected contraction in the

global economy due to the impact of coronavirus pandemic, Tata Steel has said in its annual report. Most

of the steel producing regions are expected to witness a decline in crude steel output due to production

cuts amidst ongoing lockdowns, Tata Steel said.

The global economic growth is expected to see a contraction of over 3 per cent in 2020, Tata Steel

Chairman N Chandrasekaran said terming the slump as the "worst contraction" since the 1930s. A

contraction in the global GDP is not at all a good sign for the global steel sector as steel demand is

positively correlated with the economic growth.

"Global GDP growth eased to 2.9 per cent in 2019, against an initial growth projection of 3.5 per cent...

As we look ahead, it is important to gauge Covid-19's unprecedented impact on the global economy. It is

expected that global growth will contract by over 3 per cent in 2020, the worst contraction since the

1930's," Chandrasekaran said in the Annual Report for 2019-20.

Chandrasekaran also said that this is for the first time since the Great Depression, that both advanced

and developing economies are in recession together. The impact of the slowing economy was also felt in

the global steel sector. Global crude steel production reached 1,870 million tonne (MT) in 2019,

registering a more modest growth of 3.4 per cent in 2019 against 4.6 per cent in 2018, he said.