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Steel stocks in focus; Tata Steel, SAIL rally 5% on healthy outlook

Tata Steel partly-paid up shares were locked in the 10 per cent upper circuit at Rs 80.90, which was also its 52-week high on the BSE

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Buzzing stocks | steel stocks | Tata Steel

SI Reporter  |  Mumbai 

A crane operator lifts up a finished steel coil at the storage and distribution facility of German steel maker ThyssenKrupp in Duisburg, Germany. Photo: Reuters
Recently, rating agency CARE said in a report that domestic steel production and consumption is expected to remain steady going forward

Shares of steel companies were in focus on Wednesday with and Steel Authority of India (SAIL) rallying 5 per cent on the BSE in the intra-day deals in an otherwise range-bound market on expectation of steady domestic steel production and consumption going forward.

At 01:45 pm, the S&P BSE Metal index was up 2.3 per cent as compared to a 0.09 per cent decline in the S&P BSE Sensex. Hindustan Zinc, Hindalco Industries, JSW Steel, Vedanta and Jindal Steel and Power (JSPL) were up in the range of 1 per cent to 3 per cent.

Recently, rating agency CARE said in a report that domestic steel production and consumption is expected to remain steady going forward in October-March period (H2FY21). While large players have reported faster return to normalcy after covid-19 impact, the report higlighted that recovery by smaller players is expected to be long and protracted due to their limited diversification and weaker financial flexibility.

An up-cycle in international steel prices is expected in H2FY21 due to increased steel consumption mainly by China on the back of stimulus package unveiled by the Chinese government which is keeping demand for industrial metals high.

"Firm international prices and pick up in domestic demand will also boost domestic steel prices. Steel prices have already exceeded pre-covid levels and are currently at a marginal premium to world export prices," it said.

Among the individual stocks, partly-paid up shares were locked in the 10 per cent upper circuit at Rs 80.90, which was also its 52-week high on the BSE. The stock has rallied 16 per cent in the past two trading days. Furthermore, trading volumes on the counter jumped three-fold with a combined around one million shares were changing hands on the counter in the intra-day today. There were pending buy orders for 190,000 shares on the BSE and NSE.

On the other hand, the stock's ordinary equity shares were up 5 per cent to Rs 466 on report that the company is about to close sale of European business by this weekend, as Swiden company showing interest.

The BSE sought clarification from on November 11, 2020, with reference to appeared in CNBC TV18. The reply is awaited.

The board of directors of Tata Steel is scheduled to meet on Friday, November 13, 2020 to consider and approve the audited standalone and unaudited consolidated financial results of the company for the quarter and half year ended September 30, 2020.

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First Published: Wed, November 11 2020. 14:06 IST
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