Domestic cement demand growth is expected to be flat this fiscal against the decade-high growth of 13% in the previous year.
Flattish growth notwithstanding, capacity additions of 20-22 million tonnes per annum through this year and next fiscal against 17 million tonnes per annum in FY2019 are likely to pull down industry’s capacity utilisation in the current fiscal.
Anupama Reddy, Assistant Vice-President, ICRA Ratings, said most of the incremental supplies are not fully integrated and are backed by old limestone mining leases. Also, given that the grinding capacity addition is higher in relation to the clinker capacities for these new units, the actual production from new capacities could be lower, Reddy added.
Coal India is likely to produce 600-610 million tonnes and sell 590-600 million tonnes this year, about the same as last year, company executives said. The company needs to raise output by 400 million tonnes to meet its target of 1 billion tonnes by 2024. This requires its compounded annual growth rate to accelerate to 14% from the much slower 3.1% it achieved in the past four years.
This would be a mammoth task, requiring extensive planning and synchronisation by Coal India and various central and state departments including railways. The company will also require speedy environment and forest clearances to enhance production and meet targets, a Coal India executive said.
Fitch Solutions in its outlook for the country said it has lowered its 2019-2020 (FY20) GDP growth forecast for India to 4.9%, citing weak domestic demand and supply chain disruptions due to the coronavirus outbreak. The agency expects economic growth to pick up to 5.4% in financial year 2020-21, from 5.9% previously.
Indian exporters including HEG Ltd. may win tariff relief on shipments to Europe of graphite electrodes for electric furnaces, which are used by steelmakers.
The European Union will review duties ranging from 6.3% to 7.2% that are meant to counter alleged Indian subsidies to the exporters. The inquiry will also cover separate EU levies from 8.5% to 9.4% in response to alleged below cost or “dumped” sales in Europe by the India-based companies. The duty rates vary depending on the Indian exporter. HEG faces a 7% anti-subsidy duty and a zero anti-dumping levy.
The National Highways Authority of India (NHAI) is gearing up to place its first set of road projects with an infrastructure investment trust (InvIT) in May. Also, institutional investors and private funds will be offered equity in the projects, a senior NHAI official reported to media.
First offering will be through private placement. After seeing the performance, will think of a public offer, he said. The bouquet of projects to be offered under the proposed InvIT are being finalised.
Despite financial closures improving, land acquisition issues have delayed 60% of road projects. The main reasons can be attributed to the delay in land acquisition and tight liquidity conditions. Till date, out of the 24 projects due for completion, 15 projects have witnessed delays in execution, noted Mr Rajeshwar Burla, VP-(C &R), ICRA.