Stocks of major steel companies are seen down next week on account of mounting inventories and minimal demand from government projects. Steel dealers are reluctant to build any further stock with minimal project demand visibility as government project announcements have dried up. There is also uncertainty and caution in the steel market ever since the CAG (Comptroller and Auditor General) report on coal has been released. The overall sentiment is depressed in the steel sector. Coking and thermal coal is one of the key raw materials used by the steel producers in the making of the alloy.
The government auditor had earlier this month said in its report that lack of transparency in the allocation of coal blocks to private players resulted in a loss of 1.86 trln rupees to the exchequer as on Mar 11, 2011. However, expect the recent capacity cuts by Chinese mills to arrest the fall in global steel prices, which in turn may limit the declining trend in the local steel market. A likely announcement by JSW Steel Ltd to merge its subsidiary JSW Ispat Steel Ltd with itself on Saturday is seen as a non-event by the market. JSW Steel currently holds 49.3% stake in JSW Ispat.
(www.rupeedesk.in)
The government auditor had earlier this month said in its report that lack of transparency in the allocation of coal blocks to private players resulted in a loss of 1.86 trln rupees to the exchequer as on Mar 11, 2011. However, expect the recent capacity cuts by Chinese mills to arrest the fall in global steel prices, which in turn may limit the declining trend in the local steel market. A likely announcement by JSW Steel Ltd to merge its subsidiary JSW Ispat Steel Ltd with itself on Saturday is seen as a non-event by the market. JSW Steel currently holds 49.3% stake in JSW Ispat.
(www.rupeedesk.in)
