Fitch expects decline in steel demand due to the economic impact of coronavirus pandemic.
Fitch expects decline in steel demand due to the economic impact of coronavirus pandemic.

Fitch downgrades ratings of JSW Steel, Tata Steel with negative outlook

ANI | Updated: May 25, 2020 11:32 IST


Singapore, May 25 (ANI): Fitch Ratings has downgraded issuer default ratings (IDRs) of JSW Steel and Tata Steel to BB-minus from BB after completing a portfolio review.
Fitch has also downgraded Tata Steel UK Holdings' long-term IDR to B-minus from B. The outlook is negative. The agency has also downgraded JSW Steel's and Tata Steel's senior unsecured rating to BB-minus from BB.
Simultaneously, Fitch is withdrawing Tata Steel UK Holdings' long-term IDR because the company is no longer issuing debt and there is no Fitch-rated debt outstanding following refinancing by Tata Steel for its European operations in January.

The portfolio review follows Fitch expectation of a decline in steel demand in India for the year ending March 2021 (FY21), compared with its earlier assumption of a mid-single-digit volume increase, due to the economic impact of the coronavirus pandemic.
The Indian Steel Association has forecast an 8 per cent drop in domestic demand in FY21.
"We assume standalone sales volume for JSW Steel and Tata Steel will decline by 6 per cent. We also expect a lower EBITDA margin in FY21 due to the volume drop and weaker steel prices," said Fitch.
"We assume volume and margins will increase significantly in FY22 from a weak base, supported by a broader economic recovery," it said. (ANI)

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