The country’s top steel makers have increased prices of flat steel products sold in the spot market, by up to 3% from 1 August, due to a recovery in the Auto sector and the rise in steel prices globally.
While SAIL, Tata steel, JSW and Essar have already affected the price hike, others such as Ispat are likely to follow suit soon.
However, at the same time, players such as SAIL and JSW have slashed prices of long steel products, used mainly in the construction sector, by around Rs1,500/tonne, as their demand has dropped with the onset of the monsoon.
We believe that the prices are unlikely to move significantly due to the low underlying demand globally and the excess capacities lying in the system.
We remain NEUTRAL on the steel sector.