Global rating agency, Moody's Investors Service in its latest report on Asian steelmakers has forecasted that Indian steel makers' earnings will be stable or rise in the next 12 months on the back of rising domestic demand and protectionist measures. It expects operating conditions in India to be the most supportive among major steel-producing Asian countries.
The rating agency added that this expectation comes despite an increase in raw material prices and higher production volumes arising from new capacity additions. It also said that healthy gross domestic product (GDP) growth of 7.5-7.8 percent during 2017 and 2018 as well as the Indian government's measures related to fiscal stimulus and rising infrastructure spending will underpin the demand.
Moody’s has changed the outlook for Asian steel industry to ‘stable’ from ‘negative’ on the expectation that profitability will remain steady. It has changed the outlook primarily because it expected the profitability of rated Asian steel companies -- measured by EBITDA per tonne -- to remain stable during the coming 12 months following a significant improvement that began in the second half of 2016.
