New Delhi: Domestic steel giant Tata Steel on Sunday said its consolidated steel production rose by 9.18 per cent to 7.61 million tonnes (MT) in the first quarter of the current fiscal.
The company's output in the year-ago period was at 6.97 MT, Tata Steel Ltd said in a BSE filing.
During April-June 2019, Tata Steel India produced 4.37 MT as against 3.64 MT in the same quarter a year ago.
In Europe, Tata Steel Europe produced 2.66 MT in the quarter as compared to 2.81 MT in the same period of 2018-19.
Tata Steel South East Asia produced 0.58 MT in April-June over 0.52 MT in the corresponding quarter last fiscal.
Tata Steel's consolidated sales during the quarter under review stood at 6.75 MT, up from 6.39 MT in the same period a year ago.
During April-June 2019, Tata Steel India sold 3.87 MT as against 3.34 MT in the same quarter last year.
In Europe, it sold 2.27 MT as compared to 2.45 MT.
In South East Asia, the company sold 0.61 MT in the quarter as against 0.60 MT in the same period previous fiscal.
"Global business confidence has dipped sharply in recent months amidst broader economic weakness and the uncertainty around the ongoing US-China trade conflict, which has had an adverse effect on investment decisions, capital expenditure (capex) spend and trade flows. Consequently, steel prices across many geographies declined in 1QFY20.
"This coincided with a sharp rise in iron ore prices due to supply disruptions and elevated coking coal costs. As a result, market spreads for steel producers globally have been affected," Tata Steel said in the filing.
In India, the company said that liquidity issues in the NBFC and banking sector along with rural stress have negatively impacted sentiments and overall economic activities, including domestic consumption.
Despite this, Tata Steel's production in India during first quarter increased by 20 per cent year-on-year with consolidation of Tata Steel BSL for the full quarter and higher capacity utilisation at both Tata Steel Standalone and Tata Steel BSL, it said.
In Europe, the steel industry is facing significant headwinds in terms of lower economic growth and trade flow uncertainty that is impacting steel consuming products, the company added.
"Tata Steel Europe's 1QFY20 production was impacted by planned shutdowns and unplanned outages during the quarter. This coupled with sluggish demand affected the sales volume in 1QFY20," it said.
The company further said that resumption of trade talks between the US and China, and the recent Union Budget announcements to resolve some of the liquidity issues are expected to trigger an improvement in business sentiment globally and in India. This is also expected to translate into a stronger business performance in second half of the current financial year.