www.rupeedesk.in
Stocks of major steel companies are seen down in the next few sessions as demand for the alloy remains low, and the companies' Oct-Dec earnings are expected to be weak. In Apr-Nov, growth in domestic consumption of steel was 4.2% at 48.4 mln tn. Local consumption had grown 7.6% in Apr-Jun and 5.1% in Apr-Sep. We checks paint weak demand outlook, given subdued order bookings in auto and infrastructure and dearth of enquiries. Despite low demand, most steel producers have not lowered their capacity utilisation, which coupled with increase in imports, has led to a supply glut. This gap in demand-supply is weighing on the stocks of steel companies. On the technical charts, however, the trend in these stocks is positive in the next few sessions. Short covering is likely in steel companies in coming sessions.
