www.rupeedesk.in
Stocks of major steel companies are expected to continue their downward movement next week on weak fundamentals. There is over-supply in the domestic market and uncertainty over when demand for steel will pick up. The uncertainty on demand is the main factor that is expected to keep performance of domestic steel giants muted in the coming sessions. In the week ended Friday, stocks of steel companies declined 3-7%. There is no trigger for it to move up. In the global market, iron ore prices tumbled to a seven-month low as negativity about the outlook for demand and concerns regarding overcapacity in the Chinese industry spread through. Iron ore is the key raw material used in the making of steel. The China Iron and Steel Association in its report said that mainland's steel industry made $24.72 mln profits in April, recording the fourth monthly decline. This indicates slowing demand in the world's largest consumer of steel. It portends a gloomy global steel demand, which will impact sentiment in the domestic steel industry.
