Outlook 2025: Tata Steel, JSW, JSPL, SAIL others; Improvement in domestic steel prices hold key

Outlook 2025: The returns for investors by steel stocks during 2024 have remained a mixed bag. Tata Steel, JSW Steel share prices have remained rangebound year to date with gains up to 5% for investors . Steel Authority of India Ltd (SAIL) share price on the other hand have declined 4-5% year to date. Only Jindal Steel & Power Ltd stood out with 27% returns to invetors year to date, with capacity expansions providing a trigger.

Range bound steel prices

The mixed bag returns by Steel manufacturers have been led by range bound steel prices in the domestic markets, though steel demand in the country has remained good. The weak China demand has been the reason as it meant higher steel exports from China keeping international steel prices under check and also impacting Indian steel prices.

As per 23 December report by Motilal Oswal FInancial Services, during November’24, the Flat steel prices for both Hot Rolled Coil (HRC) and CRC (Cold Rolled Coil) remained flat month on month at ₹48,000 per tonne and ₹55,500 per tonne, respectively. The MOFSL analysts attribute this to weak global prices and higher imports into India. The gap between CRC and HRC

As Steel prices remained rangebound the Input costs specially that of iron-ore have seen some surge. The concerns also have erupted due to proposed mining tax on iron-ore by Karnatak Government. If imposed analysts at PhillipCapital said that It is potentially more negative for steel players in the region, as they are hit by higher costs amid subdued realisations

Outlook 2025

CY2024 was a challenging year for the domestic steel players, as the industry witnessed earnings pressure amidst steel exports from China and other FTA countries being diverted in large volumes to high-growth markets like India, said Ritabrata Ghosh, Vice President & Sector Head – Corporate Ratings, ICRA Limited. Finished steel imports into India are poised to grow by 30%, touching 10 million tonne (mt) in CY2024, which has steadily nibbled at the market share of domestic mills.

Given the ongoing large capacity expansion plans, the steel industry’s capacity utilization is therefore slated to slip below 80% now after a gap of four years, said Ghosh. While domestic steel demand would remain resilient going forward, a meaningful recovery in buying activity in the Chinese property market, India Government’s trade policies to check rising steel imports, and global growth outlook following Trump 2.0 remain the key themes that would drive domestic steel prices in CY2025.

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