Growth levers intact for steel players as rupee, firm demand support prices

The rupee's depreciation against the dollar and strong domestic demand continues to support steel prices, buoying stock prices for entities in the sector, unlike the volatility seen in most other commodity stocks. Tata Steel and JSW Steel, the two most favoured ones among analysts, have significantly outperformed the broader indices over the past three months. The trend is likely to sustain, say the analysts, who believe Steel Authority of India (SAIL) and Jindal Steel and Power (JSPL) will also gain.Flat steel products, used for making automobiles, white goods and the like, saw prices hiked last month by Rs 500-1,000 a tonne. Analysts expect a similar rise in October, too. Prices of long steel products, which find use in construction, have risen since their August low. Finished steel consumption growth, up from 3.1 per cent in 2016-17 to 7.8 per cent in 2017-18, is to maintain a high single-digit in FY19, says Fitch Ratings.One reason for the higher steel pricing is rupee ...

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