Indian steel makers gain on reports of cut in China’s steel output

India Infoline News Service | Mumbai | January 11, 2017 17:21 IST

These reports triggered a major rally in domestic steel producers in India even as the steel producers zoomed intraday on Wednesday.

China, the world’s biggest steel producer, is likely to shut down its medium frequency furnaces by June 2017. 
The furnaces account for 9% of the total steel capacity of China. China’s current steel production capacity stands at nearly 1300 MTPA while production stands at 800 MTPA.

The closure of these furnaces may lead to a decline in production of 50 MTPA in China. 
The country may not see the impact in the ongoing winter season but would witness it during peak seasons when China’s new year starts.

The key provinces of Shandong, Tangshan and Jiangsu (70% of the medium frequency induction furnaces) have already stopped the production at the furnaces in last two months.
These reports triggered a major rally in domestic steel producers in India even as the steel producers zoomed intraday on Wednesday. 
Nifty Metal index has surged more than 4% where Jindal Steel has gained 12% followed by JSW Steel and Nalco that soared 6.7% and 6.1% respectively.
The metal index helped Nifty to trade above 8350 mark.

Stock View:
 
Jindal Steel & Power Ltd ended at Rs 81.9, up by Rs 7.05 or 9.42% from its previous closing of Rs 74.85 on the BSE.
 
The scrip opened at Rs 75.5 and touched a high and low of Rs 84.3 and Rs 74.9 respectively. A total of 44371480(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs 6848.05 crore.
 
The BSE group 'A' stock of face value Rs 1 touched a 52 week high of Rs 91.4 on 01-Aug-2016 and a 52 week low of Rs 48.2 on 12-Feb-2016. Last one week high and low of the scrip stood at Rs 77.2 and Rs 70.1 respectively.
 
The promoters holding in the company stood at 61.89 % while Institutions and Non-Institutions held 20 % and 18.11 % respectively.
 
The stock traded above its 200 DMA.

***Note: This is a NSE Chart

 

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