{"id":43286,"date":"2023-09-09T12:39:07","date_gmt":"2023-09-09T12:39:07","guid":{"rendered":"https:\/\/lethal-industry.com\/?p=43286"},"modified":"2023-09-09T12:39:07","modified_gmt":"2023-09-09T12:39:07","slug":"sentiment-turns-stronger-for-steel-stocks","status":"publish","type":"post","link":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/","title":{"rendered":"Sentiment turns stronger for steel stocks"},"content":{"rendered":"

Industrial metals (ferrous and non-ferrous) suffered great volatility once the Ukraine War began in February 2022.<\/p>\n

<\/p>\n

First, there was a sharp price rise due to fears of supply disruption, followed by weak global demand.<\/p>\n

China’s weakness and rolling lockdowns have hit production and demand.<\/p>\n

China’s central bank recently cut rates to try and revive real estate.<\/p>\n

If the real estate sector of China rebounds, this would be a key trigger.<\/p>\n

But if stimulus doesn’t show quick results, global demand may stay muted.<\/p>\n

India is also a key player.<\/p>\n

Steel demand is driven by construction, due to the Budget policy thrust.<\/p>\n

There is sufficient local demand to ensure better domestic prices.<\/p>\n

Margins may also improve due to the likelihood of lower coal costs and flat iron ore prices.<\/p>\n

India’s per capita steel consumption (81 kg) is well below the global number (225 kg) so there’s room for growth.<\/p>\n

In the longer term, recovery in automobiles, real estate and metro construction, railways network expansion and improvement, new gas pipeline networks, and increasing private capex should all drive steel demand.<\/p>\n

The Indian steel industry is scheduled to add 22 million tonnes of capacity over next two years and this may still leave room for imports.<\/p>\n

In the first quarter of the 2023-24 financial year (Q1FY24), ferrous companies struggled with lower volumes.<\/p>\n

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) per tonne also dropped for most steel producers compared to Q4FY23.<\/p>\n

In associated mining sectors, earnings of NMDC and Coal India were more or less in line with expectations.<\/p>\n

JSPL (Jindal Steel & Power) was an outlier with a sharp Rs 3,500 per tonne quarter-on-quarter (Q-o-Q) increase in Ebitda due to higher realisation and lower costs.<\/p>\n

But other steel producers saw lower Ebitda per tonne.<\/p>\n

Despite poor demand, Tata Steel and JSPL managed to reduce net debt by Rs 6,300 crore and Rs 140 crore, respectively.<\/p>\n

In Q2FY24, earnings could rebound despite possible lowering of steel prices due to sharp declines in raw material costs (coal and iron ore).<\/p>\n

Coking coal prices reduced Q-o-Q by around $50 per tonne in Q2, for example. Ore prices were stable, and may trend weaker if global demand is slow.<\/p>\n

Globally, ex-China steel production was flat in Q1FY24 with weak production in Europe and US compensated by higher India production.<\/p>\n

China saw a surge in Q1.<\/p>\n

However, July and August saw lower China production on a month-on-month (M-o-M) basis.<\/p>\n

A trend of lower China production may continue given weak demand.<\/p>\n

China’s steel exports also cooled in June’23 (down 10 per cent M-o-M).<\/p>\n

India HRC (hot-rolled coil) steel prices rose in August ’23 by about Rs 1,100 per tonne M-o-M, reversing price reductions in June and July.<\/p>\n

Domestic steel consumption is up 18 per cent year-on-year (Y-o-Y) and 7.4 per cent M-o-M in July ’23.<\/p>\n

Exports are slow. Imports are up since domestic prices are at a premium to China.<\/p>\n

Indian steel majors are likely to gain market-share — the four largest players who could gain would be Tata Steel, Sail, JSPL and JSW Steel. In Tata Steel, the fate of Europe operations — especially the UK — is critical.<\/p>\n

Another factor to note is that Tata Steel and Sail may see costs rising as and when lease of existing captive mines ends, but JSW Steel and JSPL are adding mines.<\/p>\n

NMDC remains a price and volumes play since it gains (or loses) in tandem with rising (falling) ore demand.<\/p>\n

Share prices across the iron & steel sector have been rising with traders speculating on sustainable rebounds in Q2 and future.<\/p>\n

Disclaimer: This article is meant for information purposes only. This article and information do not constitute a distribution, an endorsement, an investment advice, an offer to buy or sell or the solicitation of an offer to buy or sell any securities\/schemes or any other financial products\/investment products mentioned in this article to influence the opinion or behaviour of the investors\/recipients.<\/em><\/strong><\/p>\n

Any use of the information\/any investment and investment related decisions of the investors\/recipients are at their sole discretion and risk. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Opinions expressed herein are subject to change without notice.<\/em><\/strong><\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Industrial metals (ferrous and non-ferrous) suffered great volatility once the Ukraine War began in February 2022. First, there was a sharp price rise due to fears of supply disruption, followed by weak global demand. China’s weakness and rolling lockdowns have hit production and demand. China’s central bank recently cut rates […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"yoast_head":"\nSentiment turns stronger for steel stocks - lethal-industry<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sentiment turns stronger for steel stocks - lethal-industry\" \/>\n<meta property=\"og:description\" content=\"Industrial metals (ferrous and non-ferrous) suffered great volatility once the Ukraine War began in February 2022. First, there was a sharp price rise due to fears of supply disruption, followed by weak global demand. China’s weakness and rolling lockdowns have hit production and demand. China’s central bank recently cut rates […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/\" \/>\n<meta property=\"og:site_name\" content=\"lethal-industry\" \/>\n<meta property=\"article:published_time\" content=\"2023-09-09T12:39:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/im.rediff.com\/money\/2018\/apr\/02steel.jpg?w=670&h=900\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/\",\"url\":\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/\",\"name\":\"Sentiment turns stronger for steel stocks - lethal-industry\",\"isPartOf\":{\"@id\":\"https:\/\/lethal-industry.com\/#website\"},\"datePublished\":\"2023-09-09T12:39:07+00:00\",\"dateModified\":\"2023-09-09T12:39:07+00:00\",\"author\":{\"@id\":\"https:\/\/lethal-industry.com\/#\/schema\/person\/bd83d16d88852f915ed79f4ac43b288e\"},\"breadcrumb\":{\"@id\":\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/lethal-industry.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Business\",\"item\":\"https:\/\/lethal-industry.com\/category\/business\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Sentiment turns stronger for steel stocks\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/lethal-industry.com\/#website\",\"url\":\"https:\/\/lethal-industry.com\/\",\"name\":\"lethal-industry\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/lethal-industry.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/lethal-industry.com\/#\/schema\/person\/bd83d16d88852f915ed79f4ac43b288e\",\"name\":\"mediabest\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/lethal-industry.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/41b05721f7d80e1e707b70447e9375b5?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/41b05721f7d80e1e707b70447e9375b5?s=96&d=mm&r=g\",\"caption\":\"mediabest\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Sentiment turns stronger for steel stocks - lethal-industry","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/","og_locale":"en_US","og_type":"article","og_title":"Sentiment turns stronger for steel stocks - lethal-industry","og_description":"Industrial metals (ferrous and non-ferrous) suffered great volatility once the Ukraine War began in February 2022. First, there was a sharp price rise due to fears of supply disruption, followed by weak global demand. China’s weakness and rolling lockdowns have hit production and demand. China’s central bank recently cut rates […]","og_url":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/","og_site_name":"lethal-industry","article_published_time":"2023-09-09T12:39:07+00:00","og_image":[{"url":"https:\/\/im.rediff.com\/money\/2018\/apr\/02steel.jpg?w=670&h=900"}],"author":"mediabest","twitter_card":"summary_large_image","twitter_misc":{"Written by":"mediabest","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/","url":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/","name":"Sentiment turns stronger for steel stocks - lethal-industry","isPartOf":{"@id":"https:\/\/lethal-industry.com\/#website"},"datePublished":"2023-09-09T12:39:07+00:00","dateModified":"2023-09-09T12:39:07+00:00","author":{"@id":"https:\/\/lethal-industry.com\/#\/schema\/person\/bd83d16d88852f915ed79f4ac43b288e"},"breadcrumb":{"@id":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/lethal-industry.com\/business\/sentiment-turns-stronger-for-steel-stocks\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/lethal-industry.com\/"},{"@type":"ListItem","position":2,"name":"Business","item":"https:\/\/lethal-industry.com\/category\/business\/"},{"@type":"ListItem","position":3,"name":"Sentiment turns stronger for steel stocks"}]},{"@type":"WebSite","@id":"https:\/\/lethal-industry.com\/#website","url":"https:\/\/lethal-industry.com\/","name":"lethal-industry","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/lethal-industry.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/lethal-industry.com\/#\/schema\/person\/bd83d16d88852f915ed79f4ac43b288e","name":"mediabest","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/lethal-industry.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/41b05721f7d80e1e707b70447e9375b5?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/41b05721f7d80e1e707b70447e9375b5?s=96&d=mm&r=g","caption":"mediabest"}}]}},"_links":{"self":[{"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/posts\/43286"}],"collection":[{"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/comments?post=43286"}],"version-history":[{"count":1,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/posts\/43286\/revisions"}],"predecessor-version":[{"id":43287,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/posts\/43286\/revisions\/43287"}],"wp:attachment":[{"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/media?parent=43286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/categories?post=43286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lethal-industry.com\/wp-json\/wp\/v2\/tags?post=43286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}