Steel Stocks Outlook: Up next week on hopes of sops in Budget
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K.Karthik Raja
Feb 16, 2008, 2:53:21 AM2/16/08
to Kences1
Steel Stocks Outlook: Up next week on hopes of sops in Budget
Shares of steel companies are likely to post further gains next
week taking heart from remarks that the country will be able to
sustain a 9% economic growth rate despite global jitters.
Today, Prime Minister Manmohan Singh said although India is not
fully insulated from the global economic slowdown, the country will be
able to sustain a 9% growth in economy.
"This remark will give a lot of boost to steel makers, as the
growth of the industry is directly connected to the growth of the
overall economy," an industry official said.
Steel stocks are also likely to surge on hopes of sops in the
Budget. The steel ministry has proposed a series of measures to reduce
cost burden on steel companies.
Among these measures are scrapping of import duty on scrap metal
and metallurgical coal, halving of excise duty to 8% and ad valorem
export duty on iron ore to discourage exports of the material.
Steel companies are battling high input costs as sea freight rates
and prices of iron ore, coking coal and ferro alloys surge.
PRICE CONCERNS
Thursday, steelmakers had to cut prices by 500-1,000 rupees per
ton on the behest of the steel ministry.
Prices of TMT bars and rounds were rolled back by 1,000 rupees,
while hot-rolled coil prices were cut by 500 rupees.
TMT bars and rounds are used for building and construction.
Besides, high steel prices also threaten to spike inflation rate,
a
sensitive issue for the government.
Tata Steel Ltd and Steel Authority of India Ltd, both makers of
long and flat products, will be the most affected by the price cut.
It is a one-time intervention by the government. Steelmakers are
likely to raise prices again in March as costs rise.
Early this month,steel companies hiked product pries by
2,000-2,500 rupees a ton.
The week-on-week closing prices of key steel shares, in rupees, on
National Stock Exchange:
.
Company Closing Level Closing Level % Change
Feb 15 Feb 8
.
Steel Authority 220.80 200.95 9.9%
Tata Steel 818.15 751.35 8.9%
JSW Steel 1,187.80 1,104.65 7.5%
Jindal Steel & Power 2,327.45 2,278.30 2.2%
.
Nifty 5302.90 5120.35 3.6%
Sensex 18115.25 17464.89 3.7%
www.kences1.blogspot.com
Shares of steel companies are likely to post further gains next
week taking heart from remarks that the country will be able to
sustain a 9% economic growth rate despite global jitters.
Today, Prime Minister Manmohan Singh said although India is not
fully insulated from the global economic slowdown, the country will be
able to sustain a 9% growth in economy.
"This remark will give a lot of boost to steel makers, as the
growth of the industry is directly connected to the growth of the
overall economy," an industry official said.
Steel stocks are also likely to surge on hopes of sops in the
Budget. The steel ministry has proposed a series of measures to reduce
cost burden on steel companies.
Among these measures are scrapping of import duty on scrap metal
and metallurgical coal, halving of excise duty to 8% and ad valorem
export duty on iron ore to discourage exports of the material.
Steel companies are battling high input costs as sea freight rates
and prices of iron ore, coking coal and ferro alloys surge.
PRICE CONCERNS
Thursday, steelmakers had to cut prices by 500-1,000 rupees per
ton on the behest of the steel ministry.
Prices of TMT bars and rounds were rolled back by 1,000 rupees,
while hot-rolled coil prices were cut by 500 rupees.
TMT bars and rounds are used for building and construction.
Besides, high steel prices also threaten to spike inflation rate,
a
sensitive issue for the government.
Tata Steel Ltd and Steel Authority of India Ltd, both makers of
long and flat products, will be the most affected by the price cut.
It is a one-time intervention by the government. Steelmakers are
likely to raise prices again in March as costs rise.
Early this month,steel companies hiked product pries by
2,000-2,500 rupees a ton.
The week-on-week closing prices of key steel shares, in rupees, on
National Stock Exchange:
.
Company Closing Level Closing Level % Change
Feb 15 Feb 8
.
Steel Authority 220.80 200.95 9.9%
Tata Steel 818.15 751.35 8.9%
JSW Steel 1,187.80 1,104.65 7.5%
Jindal Steel & Power 2,327.45 2,278.30 2.2%
.
Nifty 5302.90 5120.35 3.6%
Sensex 18115.25 17464.89 3.7%
www.kences1.blogspot.com
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