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Tata Steel Chairman Mr N Chandrasekaran in annual report said that 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. He said “For most of FY 2019-20, the global steel Industry faced a number of challenges due to global demand and geopolitical tensions which have affected the contours of the business environment in which we operate. Next came the onset of the COVID-19 pandemic in the final quarter of the year, which ushered in a new reality for industries across the world. Global GDP growth eased to 2.9% In 2019, against an initial growth projection of 3.5%. In India, growth slowed to 4.2% in FY 2019-20 against an initial growth projection of 7.5% in the beginning of the year. India was just beginning to show signs of coming out of a protracted slowdown that began in early 2018 when COVID-19 arrived.”
He said “The impact of the slowing economy was also felt in the global steel sector. Global crude steel production reached 1,870 million tonnes in 2019, registering a more modest growth of 3.4% in 2019 against 4.6% in 2018. The Indian steel sector registered a stark easing of growth to 1.8% in 2019 compared to 7.7% growth In the previous year. Domestic steel prices declined sharply in FY 2019-20, minus 15% year-on-year on average, due to weak demand from key industries Including automobile, construction, and consumer durables. Overcapacity in China also played a role in the softness in steel prices last year.”
He said “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% in 2020, the worst contraction since the 1930s. For the first time since the Great Depression, both advanced and developing economies are in recession together.”