Also in other news, there were reports coming in that steel companies in India are in a spot of bother right now. The contention is simple. The automobile industry and the construction sector are in dire straits. These are the good folks that buy steel in bulk. So what happens when demand is tepid? Well, steel manufacturers take a hit.
The problem is also compounded by the fact that big steel companies tried to buy struggling, bankrupt manufacturers because they were available for pennies on the block. But then, buying all this asset and not being able to put it into productive use is a whole different kind of problem. It ties up cash (which could have come in handy now) and leaves you with dud plants that you cant use (because theres no demand).
And while the big manufacturers can wade through a downturn like this one, the smaller ones simply fold. Quite unfortunate this but it is what it is.
This article was originally published on Finshots