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Asian crisis may stain steel's record this year

The Credit Rating Information Services of India Limited has anticipated further weakening of credit quality of Indian steel companies during the current year.

The industry continues to be severely impacted by declining realisations, surplus supply situation that is likely to worsen further, lacklustre growth rate in domestic consumption, significantly lower than anticipated offtake from infrastructure projects and progressively eroding cost competitiveness of the Indian steel manufacturers in the wake of regional financial climate.

According to CRISIL, the Asian region would be faced with weakening demand and excessive supply, which could bring about further pressure on realisation and adversely impact the financial performance of the industry.

In recent times, Asia saw the lowest price levels for steel as supplies also increased from the Commonwealth of Independent States, adversely affecting price situation.

With prices reaching an unrealistically low level, most of the importing countries including the US, Canada, European Union and Indonesia have imposed anti-dumping measures.

UNI