India’s largest steel maker JSW Steel while reporting its financial results for April-June 2022 quarter said “The global economic outlook has weakened due to high inflation across most economies, with elevated energy and food prices affecting consumption. The ongoing Russia-Ukraine conflict and frequent Covid related lockdowns in China have disrupted global supply chains, and caused spikes in energy prices. The World Bank, in its June outlook, has reduced its global growth forecast to 2.9%, from 4.1% in January.”JSW Steel said “ In the United States, while PMI and IIP data still remains positive, the trend has been declining over the last few months. Aggressive tightening by Federal Reserve to tame high inflation is likely to impact investments and consumption. The Services sector remains healthy due to pent up demand, but high inflation is eroding purchasing power and consumer confidence. The employment and jobs data remains robust so far. European countries have been more severely impacted by higher energy costs emanating from the Russia* Ukraine crisis in their backyard. Policy rate tightening by the ECB, BoE and other central banks to control inflation will impact economic growth. The Services sector has been resilient so far but could weaken due to high inflation. China's zero-Covid strategy is hurting economic activity as well as consumer confidence. The recent fiscal and monetary stimulus and step up in policy action by the government to stimulate growth is expected to drive a gradual recovery in the coming quarters.”It said “The risks of a recession in advanced economies have risen in the last few months. Inflation coming off sharply, higher energy supply, easing Covid situation in China and de-escalation of geopolitical tensions are positives to stave off recessionary conditions.”JSW Steel added “Despite weakening global macroeconomic trends, India remains relatively resilient so far and continues to be the fastest growing major economy in the world with manufacturing, consumption and services sectors showing healthy traction. The Government's focus on infrastructure and social investments should continue, supported by healthy tax collections, despite some pressures to the fiscal balance. Merchandise exports from India continue to remain healthy, with re-alignment of global supply chains offering significant long term opportunities. The outlook for two-wheelers is showing positive signs on the back of healthy revival in rural demand, while the demand for passenger vehicles continues to remain high, even as commercial vehicles demand has seen some softness. The residential real estate sector remains strong with falling inventories, increasing new project launches and limited impact of rising interest rates so far. Healthy power consumption growth should drive investments in new capacities, especially renewables. However, high inflation and energy costs are having some impact on domestic consumption. Policy rate tightening by the RBI and global central banks along with slowing global growth could impact near-term GDP growth.”It concluded “India's steel consumption during Q1 of 2022-23 was 27.36 million tonnes, down 5.6% QoQ, while exports fell 26% to 2.88 million tonnes due to the weaker global demand and imposition of export duty. Considering volatile market conditions, the Company preponed certain shutdowns that were scheduled during the year, which lowered the average capacity utilization, excluding Dolvi Phase-ll, for Q1 of 2022-23 to 93% from 98% in Q4 of 2021-22. The 5 million tonnes per annum Dolvi Phase-ll expansion continued to ramp up and will drive volume growth as demand recovers in the coming quarters.”
India’s largest steel maker JSW Steel while reporting its financial results for April-June 2022 quarter said “The global economic outlook has weakened due to high inflation across most economies, with elevated energy and food prices affecting consumption. The ongoing Russia-Ukraine conflict and frequent Covid related lockdowns in China have disrupted global supply chains, and caused spikes in energy prices. The World Bank, in its June outlook, has reduced its global growth forecast to 2.9%, from 4.1% in January.”JSW Steel said “ In the United States, while PMI and IIP data still remains positive, the trend has been declining over the last few months. Aggressive tightening by Federal Reserve to tame high inflation is likely to impact investments and consumption. The Services sector remains healthy due to pent up demand, but high inflation is eroding purchasing power and consumer confidence. The employment and jobs data remains robust so far. European countries have been more severely impacted by higher energy costs emanating from the Russia* Ukraine crisis in their backyard. Policy rate tightening by the ECB, BoE and other central banks to control inflation will impact economic growth. The Services sector has been resilient so far but could weaken due to high inflation. China's zero-Covid strategy is hurting economic activity as well as consumer confidence. The recent fiscal and monetary stimulus and step up in policy action by the government to stimulate growth is expected to drive a gradual recovery in the coming quarters.”It said “The risks of a recession in advanced economies have risen in the last few months. Inflation coming off sharply, higher energy supply, easing Covid situation in China and de-escalation of geopolitical tensions are positives to stave off recessionary conditions.”JSW Steel added “Despite weakening global macroeconomic trends, India remains relatively resilient so far and continues to be the fastest growing major economy in the world with manufacturing, consumption and services sectors showing healthy traction. The Government's focus on infrastructure and social investments should continue, supported by healthy tax collections, despite some pressures to the fiscal balance. Merchandise exports from India continue to remain healthy, with re-alignment of global supply chains offering significant long term opportunities. The outlook for two-wheelers is showing positive signs on the back of healthy revival in rural demand, while the demand for passenger vehicles continues to remain high, even as commercial vehicles demand has seen some softness. The residential real estate sector remains strong with falling inventories, increasing new project launches and limited impact of rising interest rates so far. Healthy power consumption growth should drive investments in new capacities, especially renewables. However, high inflation and energy costs are having some impact on domestic consumption. Policy rate tightening by the RBI and global central banks along with slowing global growth could impact near-term GDP growth.”It concluded “India's steel consumption during Q1 of 2022-23 was 27.36 million tonnes, down 5.6% QoQ, while exports fell 26% to 2.88 million tonnes due to the weaker global demand and imposition of export duty. Considering volatile market conditions, the Company preponed certain shutdowns that were scheduled during the year, which lowered the average capacity utilization, excluding Dolvi Phase-ll, for Q1 of 2022-23 to 93% from 98% in Q4 of 2021-22. The 5 million tonnes per annum Dolvi Phase-ll expansion continued to ramp up and will drive volume growth as demand recovers in the coming quarters.”