Steel players raise steel prices - Angel Broking

Domestic steel makers including SAIL, JSW Steel, Essar Steel etc have announced to raise steel price by Rs. 700-Rs. 2,500/tonne. The increase in price is mainly backed by sharp INR depreciation against the US$ over the past two months. INR depreciation increases the landed cost of imported steel in India which gives an opportunity to domestic steel makers to raise prices.

However, we remain skeptical on steel demand in India during FY2014 given the slowdown in demand in auto, slow moving capex cycle, high interest rates etc. Hence, we believe the price hikes will eventually result in some discounts by some steel makers during 2HFY2014. Nevertheless, we believe some steel makers such as JSW Steel and Essar Steel will be able to raise their exports. Overall, we maintain our Neutral view on the Ferrous sector although we maintain our positive stance on some stocks. We have an Accumulate rating on Tata Steel with a target price of Rs. 313 and Buy rating on NMDC with a target price of Rs. 143.

Source : Equity Bulls

Keywords