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Steel stocks are seen slightly up next week on the back of positive Chinese gross domestic product growth data, although caution would be the refrain due to uncertain demand scenario. Shares of steel companies rallied 1-6% yesterday on strong economic data from China. China's GDP grew 7.8% in Jul-Sep against 7.5% a quarter ago, in line with market expectations. China is one of the world's largest consumers of steel.
While there is no V shape recovery, there should be some gradual pick up in demand from: a) good harvest, b) positives from INR depreciation flowing through the export sectors, and c) import substitution from INR weakness. The demand number also supports the price increases seen in September and October (5-8% across Flats and Longs).
Tata Steel Ltd, Steel Authority of India Ltd, and JSW Steel Ltd, and sees further upside in prices of shares of these companies as the operating environment continue to improve sequentially.
Steel stocks are seen slightly up next week on the back of positive Chinese gross domestic product growth data, although caution would be the refrain due to uncertain demand scenario. Shares of steel companies rallied 1-6% yesterday on strong economic data from China. China's GDP grew 7.8% in Jul-Sep against 7.5% a quarter ago, in line with market expectations. China is one of the world's largest consumers of steel.
While there is no V shape recovery, there should be some gradual pick up in demand from: a) good harvest, b) positives from INR depreciation flowing through the export sectors, and c) import substitution from INR weakness. The demand number also supports the price increases seen in September and October (5-8% across Flats and Longs).
Tata Steel Ltd, Steel Authority of India Ltd, and JSW Steel Ltd, and sees further upside in prices of shares of these companies as the operating environment continue to improve sequentially.
