From past one year,Steel sector companies have not participated in rally,and seems to be available at worthy valuation,Recent developments and charts show that there is an revival of interest From investor community.
Steel sector mostly has been cyclical bet in Context to Indian markets,they would see Money flowing in some particular quarters and are beaten down after that,but this time charts show some good message,A view on fundamentals and macros reveal some interesting facts: Recently China cut down steel exports,which would have favourable impact on Indian steel sector,If brokerages reports are to believed which says Global steel consumption is about to raise by 4.7 percent in 2014,and in this context China which was tough competitor has cut down its exports,which would add to the Top line of the financial statements of Steel companies.
In December Jsw steel is expected to raise steel prices by 700-1000 a tonne,which is likely to be followed by Steel Authority Of India.
Weaker Rupee is another factor which would Increase profits for steel companies due to heavy exports.There is also Good news even on raw material side,In the last week of december,62 percent Grade Iron ore prices have dipped and are unlikely to see upward movement in 2014. So given Chinas stand to cut exports which is estimated to have exported 52 million tonnes of steel in 2013 will now be cut down by 11 million tonnes by 2015 to 41 million tonnes.Indian steel sector would be greates benificiary of this recent happenings,Steel authority of India,jsw steel,Tata steel Would be major Beneficiaries.
