Buy Tata steel: Target Rs.600/-
"Global steel production has come down to 114 million tonnes in July from a high of 124 million tonnes in May. Unlike India, steel manufacturers worldwide were not able to cope with the rise in raw material prices, particularly in the face of a demand meltdown in the last few months, said a steel company official. Production in China, the world's largest steel producer, was down 4 per cent at 51.74 million tonnes in July, when compared month-on-month as smaller steel producers shut their units due to sharp rise in raw material prices.
India's flat steel imports in July were up from June levels of 5.5 lakh tonnes to seven lakh tonnes. Data for August are expected in the coming days.
Major steel producers such as SAIL, JSW Steel, Essar Steel and Ispat have already hiked prices, while Tata Steel is expected to do so this week. The recent hike bodes well for companies as it will help them offload some high-cost inventory.The move to increase prices has been implemented even though cost of raw materials such as iron ore and coking coal have started falling and set to come down further in the December quarter due to weak demand"
Courtesy: Thehindu businessline dt 05.09.2010
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