Hard hit on production of steel in Tata steel

The global markets have been trembling with the impact of Coronavirus which has halted the production, supply and distribution of raw materials such as metals, coal and oil. The global steel industry have been stuck hard as the production plants across the globe are being shut as the preventive measures of the Coronavirus outbreak. India is the second largest producer of steel with an annual output of over 106 million tonne (MT) which is much lesser than China as it accounted for 928.3 MT in 2018. The stock pile-up in China has affected the global markets as China exports most of its steel production which forms part of construction and real-estate sector. As the pressure is felt by the Chinese companies for exporting steel, Indian companies have an advantage over the situation by increasing their production capacity to supply the growing demand of steel in the market.
Tata steel being one of India’s largest steelmakers have a consolidated crude steel production of 19.6 MT with manufacturing facilities in Odisha, Jharkhand, Uttar Pradesh and Maharastra which helps in supplying its customers across the world. The following chart of Ichimoku cloud indicator shows that the price movement of the stock is bullish as the formation of the green cloud continues in an upward direction indicating the bullish trend. The chart also shows the Base line(Red) is above the Conversion line(Blue) which signifies a buy signal and also the Chikou span is showing an upward trend which is also an bullish indicator.
 

The company had also planned for expanding its production to acquire its part of profits in the market as it added Sukinda chrome mine for extracting and mining. Also the company has been infusing the flow of capital/funds by the issuance of Non-Convertible Debentures (NCD) to investors on a private placement basis. The committee of Directors have approved the allotment of 6,700 non-convertible debentures which is worth of Rs.670 crore which are to be listed in the debt market segment of the BSE.
With the slowdown of the Coronavirus outbreak and its effects in China, the rebate for exports have been increased to 13% which would also increase the competition between the steel companies across the world. The prices of steel were stabilizing until the Coronavirus outbreak which would have improvised the position of the steel industry as there were growing demand for metals across the markets. The Bollinger bands chart also shows that there has been a downward trend but the effects of Coronavirus are being encountered with few bullish candlesticks which actually indicates the trend of the stock.