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Performance of Steel Sector

With an increase in global demand for metal investors interest shifted towards steel producers. As the global inventory level is coming down.

Even The World Steel Association on April 15 forested that the steel demand will grow up by 5.8% to reach 1.874 billion mt in 2021, even after declining by 0.2% in 2020, as the impact of the Covid-19 pandemic on the sector turns out to be less than it’s earlier predicted. 

In India, the finished steel consumption grew up to a CAGR of 5.2% during the financial year 2016 to 2020 and reached 100 MT.

The production of crude steel and finished steel in India is increased by 108.5 MT and 101.03 MT in the last financial year, respectively. From April 2020 till January 2021, The cumulative production of finished steel is 76.04 MT in India.

Growth Prospect:

The steel production capacity to be increased by 300MT by the year 2030-31 whereas the production of crude steel is expected to reach 255MT by 2030-31. Whereas the production of finished steel is to reach 230 MT. 

Sector-wise demand:

The steel demand is going to rise post-Covid-19 as the all the pending projects will resume their working again. The sector like infrastructure and real estate contributes 62% of India’s steel consumption & demand. Growth of this sector 8.6% in 2018. Which slow down to 5.4% in 2019, & Pick up in 2020 & Expected to grow by 7% till 2024.

The contribution in demand for steel in the Railway sector is 3% which is growing at a fast pace. The automobile industry in India is the fourth largest & contributes 9% of steel demand.

Our country is the largest manufacturer of two-wheeler, tractors, and we are the fourth largest in passenger vehicles production, and stand seventh in commercial vehicles. The capital goods sector contributes 15% of steel demand.

It has various sub-segments like machinery and other equipment which are most prominent.

This segment is further divided into construction and earth-moving machinery, plant & heavy electrical machines. The consumer durables sector has a 5% contribution to India’s steel demand.

India is a consumption-driven economy and the sector has witnessed robust growth in the past few years. The Intermediate products sector contributes 6% of steel demand. This segment is closely associated with the auto sector, oil, and gas sector.

5 Top Performing Stock in Steel Sector. 

Jindal Steel & Power Limited 

Business: The company is the largest integrated steel manufacturer, along with the power generation & infrastructure segment.

Returns during a pandemic: JSPL has given a 208% return from its 52 week low of Rs 62. Made a high of Rs 501

JSW Steel 

Business: JSW steel is in the business of manufacturing & sale of Iron & steel products 

Returns during a pandemic: JSW Steel has given a 267% return from its 52 week low of Rs 132.50. Made a high of Rs 773.

Steel Authority of India Limited 

Business: SAIL is a Government-owned company primarily in the business of manufacturing & selling Iron & steel products 

Returns during a pandemic: SAIL has given a 291% return from its 52 week low of Rs 20.15. Made a high of Rs 151.30.

TATA Steel 

Business: The company engaged in the business of steel manufacturing from mining & processing Iron Ore to production & distribution of Finished products. 

Returns during a pandemic: TATA Steel has given a 251% return from its 52 week low of Rs 250.85. Made a high of Rs 1246.85.

Hindalco Industries Ltd.

Business: Primarily the company is engaged in the business of aluminium production & products of aluminium & copper and copper products. It is a company under the flagship of Aditya Birla Group 

Returns during a pandemic: Hindalco has given a 182% return from its 52 week low of Rs 84.90. Made a high of Rs 427.50.

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