Shares of several steel stocks including TATA Steel, JSW Steel, NMDC and SAIL are all in the green.
What Happened: The sectors seem to be reacting positively to the Chinese steel survey that estimated steel production and demand to be higher this year. The survey showed that steel mills in the country are looking to buy more raw materials as they expect demand to increase.
Domestic brokerage ICICI Securities also remains largely positive in the sector. It expects sales volumes of ferrous companies to grow at 12-15% QoQ in a seasonally strong quarter. However, the analysts noted that most big steel players missed consensus EBITDA estimates by 25-45% except SAIL.
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Going forward the brokerage firm expects EBITDA for steel companies to expand further QoQ due to higher export realisation but warned that “coking coal cost might play the spoilsport.”
The analysts have a ‘buy’ rating for Jindal Steel, and an ‘add’ rating for Tata Steel, NMDC. It however has a ‘reduce’ rating on SAIL and a ‘sell’ rating for JSW Steel.
Price Action: Here’s how steel stocks traded on Tuesday afternoon.
JSW Steel was up 0.56% to trade at ₹726.75
TATA Steel jumped 1.29% to ₹113.80.
Shares of SAIL were trading 1.28% higher at ₹87.20
NMDC shares were up 1.05% to trade at ₹119.95.
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