Growing Chinese demand, rising global prices to help domestic steel players

Rising Chinese demand, expected supply cuts in winter and global prices rising to above anti-dumping duty levels bode well for domestic companies

Domestic steelmakers such as Tata Steel, JSW Steel, Steel Authority of India (SAIL), and Jindal Steel & Power (JSPL) have been gaining on the bourses in the recent past, following brokerage upgrades on account of improving fundamentals. The stocks are up 24-63 per cent since their October lows, and there could be more legs to the rally.

The Street’s confidence stems from the rising Chinese demand, which is supporting international steel prices at a time when there are expectations of trade tariff talks between the US and China succeeding. The Chinese steel demand in 2019 has also come ahead of