Outlook 2025: Returns for investors from steel stocks through 2024 have been a mixed bag. Tata SteelJSW Steel share prices remain in range for investors with gains of up to 5% year-to-date. Steel Authority of India On the other hand, share price of Ltd. (SAIL) has fallen by 4-5% so far. Only Jindal Steel and Power Ltd. has been leading investors with 27% returns year-on-year, with capacity expansion providing a trigger.
range bound steel prices
The mixed bag returns by steel makers have been led by tight steel prices in the domestic markets, although steel demand in the country remains good. Weak demand from China has been the reason for this as it means that more steel exports from China will keep international steel prices under control and will also impact Indian steel prices.
According to Motilal Oswal Financial Services report dated December 23, during November 24, flat steel prices for both hot rolled coil (HRC) and CRC (cold rolled coil) remained stable month on month. 48,000 per tonne and 55,500 per tonne respectively. MOFSL analysts attribute this to weak global prices and higher imports into India. Difference between CRC and HRC
As steel prices remained range-bound, input costs, especially iron ore, saw some increase. Concerns have also increased due to the proposed mining tax on iron ore by the Karnataka government. Analysts at PhillipCapital said this is potentially more negative for the region’s steel players, as they are hit by higher costs amid lower realizations.
outlook 2025
CY2024 was a challenging year for domestic steel players, as the industry saw earnings pressure amid the shift of large volumes of steel exports from China and other FTA countries to high-growth markets like India, said Vice President and Sector Head – Corporate Ritabrata. Ghosh said. Ratings, ICRA Limited. Finished steel imports into India are likely to increase by 30% to 10 million tonnes (mt) in CY2024, leading to a sustained erosion in the market share of domestic mills.
Ghosh said that given the ongoing large capacity expansion plans, the steel industry’s capacity utilization is now expected to come down to below 80% after a gap of four years. While domestic steel demand will remain resilient going forward, a meaningful improvement in purchasing activity in the Chinese asset market, Indian government’s trade policies to curb rising steel imports and the post-Trump 2.0 global growth outlook will remain the key themes that will drive domestic steel demand. Will increase prices. CY2025.
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