Steel Prices in the spot market have declined by Rs 500-700 a tonne in a week. This was mainly due to weak in demand from consumer industries. Prices have increased more than 15% percent since december 2017.
Why is this important?
The movement in price depends on many factors like demand, import, trend from competition and also raw materials. Iron-ore is already under-priced. NMDC has cut ore prices for karnataka putting other miners under pressure. Long prospects of steel looks positive, given an improvement in domestic demand and strong raw material prices like Irone core and coking coal.
Stock to be impacted
This is positive for steel companies Like Sail(CMP 78.5, M. Cap 32,421crs, 7.1 FY20 PE, P/BV 94.1 FY20), Tata steel(CMP 543, 7.9 FY20 PE,P/BV 1 FY20).