Tata Steel loses almost a third of its share value in 3 months as coronavirus chokes inputs
- The stocks of
Tata Steelstood at ₹293 today (March 17) as the markets opened higher after yesterday's crash.
- The company’s share price dipped to a 3-month low — from ₹421.05 to ₹286.8 on March 12.
- Tata Steel, which sources materials like refractory, steel mill rolls, electrodes and manganese from China, is eyeing alternate markets like Brazil and Turkey.
This is a 31.8% slump in the stock price in the last three months as the markets across the globe felt the jitters of the Coronavirus outbreak. Along with trade, travel came to a grinding halt.
Supply and sale affected
Tata Steel, which sources materials like refractory, steel mill rolls, electrodes and manganese from China, is bearing the brunt as the country is the epicenter of the outbreak. While the company is looking to place orders in alternate markets like Brazil and Turkey, it would add to its costs.
“We have already carried out a risk assessment and are comfortable till April. Our operations have not been affected," T V Narendran, CEO & MD of Tata Steel said during the CII’s annual meeting.
On the other hand, the steel prices are also affected and fell to ₹37,000 a tonne from ₹46,000 per tonne last year. In November 2019 when Coronavirus was first reported, prices slipped to as low as ₹32,250 a tonne.
Stocks crashed by 20% in last 15 days
The stocks crashed by 20% in the last 15 days, affected by supplies from the markets in China.
What is more to the worry for the steel market is that almost 30 million inventory is piling up in China. And it is yet to be seen if that volume will be exported or supplied within the home market. "If you leave the virus out, we were seeing green shoots in the economy. Things were picking up in multiple areas," Narendran said.
AdvertisementHowever, it might be tougher to realise these green shoots as the country is coming to a standstill. Tata Steel, on Monday (March 16) advised its officials to work from home and avoid unnecessary gatherings. The company imposed travel restrictions for employees — both international and domestic business travel.
All of Adani Group stocks suffer as oil price war adds fuel to fire amidst ‘coronacrash’
Mukesh Ambani has lost at least $17 billion in 26 days as Coronavirus fears dent RIL shares
'Corona crash' wipes over ₹2 lakh crore from TCS share value in just 3 months
Popular on BI
- Not hard, not soft, the earliest dino eggs may have been of a 'leathery' texture to protect against damage: study
- Don't need to go big to go home: Australia is turning to sustainable 'tiny houses' to fix their housing crisis!
- Affordability levels to buy homes hit in last 2 years; to improve in 2024 on likely repo rate cut: JLL
- Carbon tax turns into climate fight at COP28
- Market to focus on macro data, global trends: Analysts