Steel Stocks Outlook: Down next week on weakening prices
0 views
Skip to first unread message
B. Karthick
Aug 30, 2008, 3:57:31 AM8/30/08
to Kences1
Steel Stocks Outlook: Down next week on weakening prices
Saturday, Aug 30
Steel shares are likely to be under pressure next week as prices
of the commodity softens in the domestic as well as global markets.
The fall in global prices comes at a time when steel makers would
have liked to offset higher raw material costs.
We are watching the situation very carefully. Global prices are
softening and imports are becoming cheaper. There is little scope for
a price increase next month," a steel company official said.
Retail steel prices in the country have been on the hold since
early May, but contract prices have been on the rise.
A time has come when even contract prices have to be frozen, may
be even cut, as an overall slowdown looms.
Global steel prices have fallen nearly $150 per tn in the last one
month, as demand in North America and Europe slows down.
In China, which consumes nearly one-third of global steel
consumption, demand has slackened of late. But we see this as a
temporary phenomenon and expect demand to revive by the end of the
current calendar year.
The Jul-Sep quarter has been traditionally bad for India's steel
industry, as construction activity during this period slows down
because of rains.
Construction activity has been the largest driver of steel demand
in India in the last couple of years. Prices of long products have
risen faster then flat products' during this time.
INFLATION FEAR
Headline inflation rate continues to be at alarming levels,
although the latest number was a decline from the previous week.
Yet, the government refused to read too much into it. Finance
Minister P. Chidambaram said a week's fall in the inflation rate was
not conclusive.
As long as inflation comes in the tolerable range, the government
may continue to tighten the noose on the steel prices.
Week-on-week closing prices of key steel companies' shares, in
rupees, on National Stock Exchange:
Company Closing Level Closing Level % Change
Aug 29 Aug 22
Steel Authority 156.10 150.20 3.9%
Tata Steel 600.70 593.75 1.2%
JSW Steel 764.00 763.15 0.1%
Jindal Steel & Power 1,906.60 1,917.35 - 0.6%
Nifty 4360.00 4327.45 0.8%
Sensex 14564.53 14401.49 1.1%
End
B.Karthick
Research Analyst.
Saturday, Aug 30
Steel shares are likely to be under pressure next week as prices
of the commodity softens in the domestic as well as global markets.
The fall in global prices comes at a time when steel makers would
have liked to offset higher raw material costs.
We are watching the situation very carefully. Global prices are
softening and imports are becoming cheaper. There is little scope for
a price increase next month," a steel company official said.
Retail steel prices in the country have been on the hold since
early May, but contract prices have been on the rise.
A time has come when even contract prices have to be frozen, may
be even cut, as an overall slowdown looms.
Global steel prices have fallen nearly $150 per tn in the last one
month, as demand in North America and Europe slows down.
In China, which consumes nearly one-third of global steel
consumption, demand has slackened of late. But we see this as a
temporary phenomenon and expect demand to revive by the end of the
current calendar year.
The Jul-Sep quarter has been traditionally bad for India's steel
industry, as construction activity during this period slows down
because of rains.
Construction activity has been the largest driver of steel demand
in India in the last couple of years. Prices of long products have
risen faster then flat products' during this time.
INFLATION FEAR
Headline inflation rate continues to be at alarming levels,
although the latest number was a decline from the previous week.
Yet, the government refused to read too much into it. Finance
Minister P. Chidambaram said a week's fall in the inflation rate was
not conclusive.
As long as inflation comes in the tolerable range, the government
may continue to tighten the noose on the steel prices.
Week-on-week closing prices of key steel companies' shares, in
rupees, on National Stock Exchange:
Company Closing Level Closing Level % Change
Aug 29 Aug 22
Steel Authority 156.10 150.20 3.9%
Tata Steel 600.70 593.75 1.2%
JSW Steel 764.00 763.15 0.1%
Jindal Steel & Power 1,906.60 1,917.35 - 0.6%
Nifty 4360.00 4327.45 0.8%
Sensex 14564.53 14401.49 1.1%
End
B.Karthick
Research Analyst.
Reply all
Reply to author
Forward
0 new messages