Steel Stocks Outlook for the week (14-18.01.2013)

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Stocks of major steel companies are seen slightly down over the next few sessions as fundamentals continue to remain weak.Weak demand for steel amid high supply will weigh on these stocks. Almost all primary steel producers raised their product prices from January 1 on the back of rise in raw material prices.

JSW Steel Ltd raised prices of all its products in the range of 750-1,000 rupees per tn, while unlisted Rashtriya Ispat Nigam Ltd hiked steel product prices by 1,000-1,500 rupees per tn. Steel Authority of India Ltd also raised prices of by an average 500 rupees per tn. Hike in steel product prices could not have been helped as global trend was firm. This week, stocks of major steel companies such as Steel Authority of India, Tata Steel, JSW Steel, and Jindal Steel and Power declined 3-5% on profit sales.

Steel Stocks Outlook for the week (24-28.09.2012)

Stocks of major metal companies are unlikely to get a boost from the decline in prices of key raw materials as domestic demand for the metal remains weak. Local demand for steel usually picks up in October and stays strong until May. Jun-Sep is a lull season for the sector because southwest monsoon rains halt construction activity in the country. Fall in prices of coking coal and iron ore is expected to improve the margins of domestic steel producers.

However, companies such as JSW Steel and Steel Authority of India are not expected to benefit much from the decline in raw material prices. Steel Authority of India's capital expenditure plan is seen keeping its debt levels high. Due to this, the benefit of lower coking coal and iron ore prices will be minimal for the company.

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