Asian steel firms get negative outlook from Moody's on weaker profitability

Cites rising input costs, inability to pass on higher costs for revised outlook; India's steel demand to remain strongest in region, but auto and manufacturing sector demand could drag

Moody's Investors Service has revised its outlook for Asian steel sector to negative. In its report today, Moody's said rising input costs and an inability to pass on higher costs to customers is pressuring the profitability of Asian steel producers.

"We expect steel producers' profitability—as measured by EBITDA per tonne—will decline by around 15 per cent in the 12 months to June 2020, following an eight per cent drop in the 12 months to June 2019," Chris Park, associate managing director in Moody's Corporate Finance Group was quoted as saying.

Prices of iron ore and coking coal, two key steel-making inputs, have