Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Steel: Signs of strength - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Mar 20, 2002

    Steel: Signs of strength

    Steel production, which stalled in the first five months of FY02, started rising, beginning September 2001. Production of hot rolled coils (HRC), cold roll (CR) coils & sheets and galvanized product and sheets grew at better than expected rates during the period September December 2001.

    Finished steel production increased by 3.5% in December 2001, which is the highest growth recorded since February 2001. A rise in infrastructure activity has helped in boosting production growth. This is reflected from 8% rise in bars & rods and a growth of 30% in GP/GC sheets, which are used for construction purpose. Housing and infrastructure activity in the country continued to grow at a strong rate, spurring steel production. Production of CR sheets and coils increased by a marginal 5% in line with the production of passenger cars, which rose by 7% in the first 10 months of FY02. Production of passenger cars is rising at healthy rates, which is likely to drive CR sheet demand in the coming months. HR sheets production too spiraled up by 22% on the back of increasing demand from engineering industry. On the other hand, steel structurals and HR coils recorded negative growth rates.

    Snapshot of steel production
    ('000 tonnes) April-Dec '00 April-Dec '01 Change Growth in Dec '01
    Steel structurals 1,758 1,649 -6.2% -9.9%
    Bars & rods 6,811 7,341 7.8% 3.7%
    HR coils 6,159 5,648 -8.3% 0.7%
    HR sheets 361 441 22.2% 48.4%
    CR sheets/coils 3,024 3,176 5.0% -0.8%
    GP/GC sheets 1,126 1,462 29.8% 34.3%
    Finished steel 22,039 22,234 0.9% 3.5%

    In order to boost steel production growth, the Union Budget has provided some relief to the industry by lowering custom duty on raw materials (natural graphite powder, silicon metal, sintered alumina and boron carbide). Reduction in duty to an extent would help steel companies in bringing down their cost of production. The government has also increased the custom duty on seconds and defective to protect the industry from low price imports. These measures are likely to contribute in improving the languishing steel production growth.

    Meanwhile, steel prices in the International markets have started showing an up tick in the recent months on the back of a rise in demand and reduction in inventories by steel majors. In the domestic market, SAIL and Tisco have already increased prices of flat and CR products by 8%-9%. Prices of HR coils and sheets have been hiked by similar percentage to Rs 11,700 Rs 13,500 per tonne. Steel exports are also likely to rise as the US has exempted the Indian steel exports from the additional tariff of 30%. Improvement in realizations and pick up in volumes would be reflected in the financial performance of steel companies in the first quarter of next fiscal.



    Equitymaster requests your view! Post a comment on "Steel: Signs of strength". Click here!


    More Views on News

    Tata Steel: A Strong Quarter (Quarterly Results Update - Detailed)

    Aug 12, 2017

    Tata Steel reported a robust operating performance on the back of strong domestic and European operations.

    SAIL: Loss at EBITDA Level Due to Higher Raw Material Cost (Quarterly Results Update - Detailed)

    Jun 12, 2017

    The company registered a negative EBITDA of Rs 2.64 billion during the quarter. This is on the back of an increase in raw material prices.

    Tata Steel: Strong Quarterly Performance (Quarterly Results Update - Detailed)

    May 22, 2017

    Tata Steel reported a robust operating performance on the back of strong domestic and European operations.

    SAIL: Pressure Continues. Loss at Operating Levels... (Quarterly Results Update - Detailed)

    Feb 15, 2017

    SAIL has reported a 26.2% YoY increase in the topline while the bottomline reported a loss of Rs 7.94 billion.

    Tata Steel: Loss from Discontinued Business Mars Performance (Quarterly Results Update - Detailed)

    Sep 27, 2016

    Tata Steel has reported a 6.3% decline in the topline while the bottomline was in red in 1QFY17.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 03:37 PM