Shares of select steelmakers were in the green on March 28 on prospects of further price hikes in the coming months.
At 10:00 am, shares of Ratnamani Metals, Tata Steel, and JSW Steel were up 0.2-1 percent on the National Stock Exchange.
The sector got a fillip after brokerage Phillip Capital in a note said that JSW Steel has raised price of Hardness Rockwell C grade steel prices by Rs 2,000 per tonne on March 25 after raising prices by Rs 1,500 per tonne earlier in the month.
The successive price hikes have come after a momentary pause in price increases by steel companies due to softening global commodity prices prior to Russia’s invasion of Ukraine last month.
Global commodity prices, however, have surged in the past month owing to sanctions imposed on Russia by several advanced countries following its invasion of Ukraine. Further, the return of lockdowns in several Chinese cities following a spike in COVID-19 spike has also exacerbated the supply situation in the steel market.
China recently imposed a phased lockdown in one of its biggest industrial hubs, Shanghai. Analysts believe the lockdown could further tighten steel markets as producers face production halt in the region.
Brokerage Citigroup in a note said that amid geopolitical tensions, the ‘reflation’ trade of 2021 could last longer. The brokerage firm is of the view that if current spreads on spot prices of steel sustain then Tata Steel could see significant upside followed by Jindal Steel & Power.
Analysts believe that further increase of HRC steel prices by Rs 3,000 per tonne by domestic producers could not be ruled out.
Copyright © e-Eighteen.com Ltd All rights resderved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited.
