Global supply, margin pressures overhang for Indian steelmakers' stocks

Analysts are advising a cautious stance on the steel sector due to a combination of factors. The major one is that China has maintained momentum on steel exports in CY24 and there could also be domestic over-supply in the medium-term.

Trade data for Jan-Feb’24 shows that China’s finished steel exports rose 31 per cent year-on-year (Y-o-Y) to 15.9 MT.  

Exports are high due to weak Chinese domestic steel demand which contracted 2 per cent Y-o-Y in CY23 due to a weak housing market (new housing starts in CY23 were the lowest since CY09).

The PRC government-backed China Metallurgical Industry Planning