While profitability of other Asian steel companies will continue to decline, Indian steelmakers will remain better off, thanks to relatively high domestic economic growth and rising demand, Moody’s Investors Service said on Wednesday ascribing negative outlook for the region’s steel sector.
“Indian steel companies to show lower profitability than in the past, but remain more profitable than Asian peers owing to relatively high domestic economic growth, rising demand (we expect mid-single-digit percentage growth in 2016) and captive iron ore mines,” it said in its outlook for the next year.
However, it warned that exports from China will continue to go up as the recently imposed safeguard duty will have a modest positive impact on the Indian steel producers’ profitability.