Domestic steel prices to feel limited pressure in next 12-18 months: Moody’s
The Dollar Business Bureau
Moody's Investors Service on Wednesday said the domestic steel prices are expected to experience limited global pressure over the next 12-18 months due to the government’s adequate protectionist measures such as safeguards and anti-dumping duties.
"Nevertheless, with domestic steel prices lower than international prices and adequate protections in place in the form of safeguards and anti-dumping duties, Moody's anticipates limited pressure on steel prices over the next 12-18 months," Moody’s said in a statement.
Moody's expects India's steel consumption be in the proximity of India’s projected GDP growth of 7.5% and 7.6% in 2017 and 2018, respectively.
Meanwhile, the global rating agency assigned Ba3 rating to JSW Steel's suggested senior unsecured notes. It said the proposed issue will primarily be utilised towards retiring the debt of the company. It said that the ratings outlook is stable.
"The proposed notes rank pari passu and are therefore rated at the same level as the company's existing $ 500 million senior unsecured notes, maturing in 2019 and its corporate family rating (CFR) of Ba3," it said.
JSW's crude steel capacity is slated to stand at four million tonnes in financial year 2016-17. A significant proportion of high-margin value-added products is expected to be the main driver of the company's profitability this year.
"Moody's does not expect recent rise in iron ore and coking coal prices to be passed on entirely, as such, JSW's EBITDA/tonne should average less than Rs.7,900 for FY2017, and remain flat or fall modestly in 2017-2018," it said.