JSW Steel vs Tata Steel the race continues
Action continues unabated in steel industry. The Indian private steelmakers JSW Steel and Tata Steel, which are in rampant acquisitions to increase the capacities, look to submit bids for Usha Martin’s 1 MT steel unit. JSW will replace pharma major Lupin in the Nifty 50 index from next month as its market value inches closer to Rs 1 lakh crore. The Chinese steel import to India fell in the first four months of this year when domestic demand picks up. The steel companies look to increase the steel prices by 5-8 per cent from next month.
Reports say that both JSW and Tata look to submit bids for Usha Martin’s 1 MT steel unit. Tata recently acquired Bhushan Steel, which helped it increase its production capacity to 18.6 million tonne (MT). On the other side, JSW bought Monnet Ispat and emerged as the lead bidder for 3.5 MT Bhushan Power & Steel. With the addition of 1.5MT Monnet, the capacity of JSW increased to 19.5 MT. In addition, both are planning for Greenfield capacity expansions.
The resurgent steel manufacturers in the country are set to increase the steel prices by Rs 1500 a tonne from September. It will eventually help them realise better margins. The major reason for steel price increase is the depreciation of the Indian rupee, which made the import of the raw material coking coal expensive. The coal price has increased 14 per cent year-on-year, while rates of domestically sourced iron ore shot up by 11 per cent. The merchant miners in Odisha have started charging a premium of Rs 900 for a tonne of iron ore. The steel price is expected to move up by Rs 1,500 per tonne for both downstream products and hot-rolled coils. The increase is expected to be even steeper for long products.