Improving realisations may help steelmakers forget Covid-19 memories

Improving realisations and cheaper raw material should help profitability, though domestic demand is yet to reach pre-Covid levels

Steel stocks, which continued to gain from their March-April lows, have now regained levels last seen in February this year. Tata Steel, JSW Steel, and SAIL have rebounded 57-84 per cent, while Jindal Steel & Power (JSPL) has been a strong outperformer, gaining more than 200 per cent.

The trigger has been provided by improving steel realisations, after the beating taken during the April-May period following the lockdown. Though the gradual start of economic activities helped, the larger impetus has been provided by the pick-up in Chinese steel demand and consumption, thereby pushing up the international steel price. The Chinese