The government's focus on infrastructure development is increasing demand for steel and pushing its price higher and in turning telling on the price of sectoral stocks. With India becoming the world's third largest steel producer, the sector is set to grow at a faster pace in India. China, though largest producer of steel in the world, has higher dependence on international demand.
"Indian steel stocks have been climbing since last some trading sessions. To gain from the advantage Indian steel producing companies have, some foreign institutional players have been investing in steel stocks since some days," said Pawan Borde, metal stocks analyst at Angel Broking.
"JSW saw the best rally since October lows," said Borde, adding, "SAIL (SAIL.NS : 191.25 -0.85) has also seen rally due to government initiative on infrastructure development." SAIL's stock has risen by about 15 per cent in a month, while JSW has risen by 6 per cent. However, with surplus global capacity of steel, it is unlikely that Indian companies would be able to benefit much from a global trend, said Avinash Gupta, assistant vice-president, research, equity at Bonanza Portfolio Ltd.Indian steel makers have more captive iron ore mines within and outside India than Chinese firms. "While global demand for steel is expected to reduce by 14 to 15 per cent in the fiscal year 2010, the domestic demand is likely to grow by 6 to 7 per cent in the same period," said Borde.
Quotes delayed, except where indicated otherwise.
Delay times are 15 mins for BSE and NSE(when not logged-in) See also delay times for other exchanges.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Prior to execution of any security trade, you are advised to consult your authorized financial advisor to verify the accuracy of all information. Neither Yahoo! nor any independent provider is liable for any informational errors, incompleteness or delays or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found herein.
) has also seen rally due to government initiative on infrastructure development." SAIL's stock has risen by about 15 per cent in a month, while JSW has risen by 6 per cent. However, with surplus global capacity of steel, it is unlikely that Indian companies would be able to benefit much from a global trend, said Avinash Gupta, assistant vice-president, research, equity at Bonanza Portfolio Ltd.Indian steel makers have more captive iron ore mines within and outside India than Chinese firms. "While global demand for steel is expected to reduce by 14 to 15 per cent in the fiscal year 2010, the domestic demand is likely to grow by 6 to 7 per cent in the same period," said Borde.
