Tata steel, SAIL, JSW the nation’s top producers, may raise prices by as much as 4 percent next month because of lower imports from China and a surge in demand.
Prices, which rose an average 4 percent in September, are likely to gain for the second consecutive month, said Rahul Jain, an analyst at RBS in Mumbai. The bulk of demand may come from farmers who are expected to spend more during the festival season after a robust monsoon, said Nikhil Agarwal, an analyst at Kim Eng Securities India Ltd. in New Delhi.
An above-average monsoon, the main source of irrigation for the nation’s 235 million farmers, is expected to produce a record crop this year, boosting agricultural incomes and sales of homes, tractors and motorcycles. China’s move to restrict power supplies to mills will likely diminish exports to India, lifting demand for Indian-made steel.
“Indian steelmakers lost out to imports in the first five months of this fiscal year,” said Jain, who has a “buy” rating on shares of Tata Steel and Steel Authority and a “hold” rating for JSW. “In China, there are efforts to lower output, which may lead to a drop in shipments to India.”
Source: Bloomberg
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