Valuations reflect upside for listed steel majors despite weak Q2

India's steel sector gains from Chinese production cuts, resilient domestic demand and export momentum, though near-term margins face seasonal weakness and input cost pressure

There are some signs of optimism about India’s steel sector, despite recent moderation in steel prices and unseasonal weather affecting construction. China has started cutting steel production since April 2025 and it is likely to implement yet another stimulus package for its real estate sector. Both measures are positive for the global steel industry. The production cuts are also expected to continue, restricting the flood of cheap Chinese exports while the stimulus may result in better offtake within China.

 

In India, growth remains strong with steel consumption and production increasing. It is likely that prices have bottomed out or are