Global rating agency Moody's has revised its outlook for Indian steel sector to negative owing to the factors like rising input costs and inability to pass on higher costs to customers.
It also said that India's steel demand will remain strongest in Asia but slow to mid-single-digit growth, as weak auto and manufacturing demand offsets the growth in the infrastructure and construction industries.
As per Moody's, the rising input costs and inability to pass on higher costs to customers is pressuring the profitability of Asian steel producers. The agency is expecting steel producers' profitability, as measured by EBITDA per tonne, will decline by around 15 per cent in the 12 months to June 2020, following an 8 per cent drop in the 12 months to June 2019.