Outlook for 2025: Steel stock returns for investors in 2024 are still mixed. Share prices of Tata Steel and JSW Steel have remained within their range so far, with gains of up to 5% for investors. In contrast, Steel Authority of India Ltd (SAIL) share price is down 4-5% this year. Only Jindal Steel & Power Ltd stood out with a 27% return for investors this year, with capacity expansions acting as a trigger.
Range-based steel prices
Steelmakers’ mixed returns were driven by range-bound steel prices in domestic markets, although steel demand remained strong in the country. Weak Chinese demand was to blame for this as it meant that steel exports from China kept international steel prices in check and also affected Indian steel prices.
According to the December 23 report from Motilal Oswal FInancial Services, flat steel prices in November 24 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 within a certain range, input costs, especially iron ore, have seen some increase. The concerns have also arisen due to the proposed mining tax on iron ore by the Karnatak government. If imposed analysts at PhillipCapital said it is potentially more negative for steel players in the region as they are hit by higher costs amid subdued realizations
Outlook 2025
CY2024 was a challenging year for domestic steel players as the sector witnessed earnings pressure while steel exports from China and other FTA countries were diverted in large volumes to fast-growing markets like India, said Ritabrata Ghosh, Vice President & Sector Head – Corporate Reviews , ICRA Limited. India’s finished steel imports are expected to grow by 30% and reach the 10 million tonne mark by the year 2024, which has steadily chipped away at the market share of domestic mills.
Given the ongoing plans for major capacity expansion, the steel industry’s capacity utilization rate will now fall below 80% after a four-year gap, Ghosh said. While domestic steel demand should remain resilient going forward, a meaningful recovery in purchasing activity in China’s real estate market, the Indian government’s trade policies to curb rising steel imports, and global growth prospects post-Trump 2.0 remain the key themes driving the would cause domestic steel prices to rise in the future. 2025.
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