Tata Steel sees Indian steel demand up 5 pct in 09

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28 Feb 2009

Tata Steel sees Indian steel demand growing by 5 percent in 2009 and expects prices to remain stable, a top official said on Friday. "In India I do believe that all the government packages have stimulated demand upwards, and I do expect steel demand to grow positively, by maybe about 5 percent this year as against the original figure of 10-12 percent," managing director B. Muthuraman said.
Steel makers around the world have seen sales and prices fall as the credit crisis and economic slump hits demand from major steel consuming sectors such as automotives, consumer goods and construction..
Signalling that tough times will continue throughout this year, Tata said its Anglo-Dutch Corus unit would continue to keep capacity idle into the second half of 2009.
Corus, Europe's second-largest steelmaker and which contributes most of Tata Steel's output, plans to keep 40 percent of its 20 million tonnes capacity unutilised in the first six months of this year, its top official said.
"As we see market conditions, the next two quarters will continue to see weak demand. We won't extend production cuts, but we are not likely to restart either," Phillipe Varin, chief executive of Corus told a news conference.
Tata Steel said its December-quarter consolidated net profit after minority interest and the share of profit of associates, including Corus, fell 39 percent to 8.14 billion rupees ($160 million), from a restated 13.25 billion rupees a year earlier.
It said net profit would have been lower by 42.56 billion rupees had it followed its earlier accounting practice instead of recording actuarial gains and losses on employee benefit funds in reserves and surplus.
"Our geographical spread and wide variety of products insulated us. But mostly, our continuous improvements and operational savings helped us stay resilient," Managing Director B. Muthuraman told reporters.

Source: Reuters