Pricing uncertain amid rising input costs.
Chinese prices may revive
The Chinese steel prices have corrected ~10% in the past three months or so. We believe, at the current HR prices, the Chinese steel mills would only be marginally profitable at the EBITDA level once the revised raw material contracts pricing creeps in.
Cost push pressures to mount on Indian companies
Although the domestic demand remains intact, global uncertainties continue to plague the scenario. Going ahead we expect the Indiandemand to rule firm, yet we see a strong cost push impact on Indian steel producers at large. Thus, though we expect the volume growth to continue for Indian steel players, their margins would be under stress.
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