JSW Steel emerges as lone star among India metal stocks
Metal stocks in India are feeling unloved by investors, with one exception: the country’s top steelmaker JSW Steel Ltd.
While demand for metals has been accelerating as the South Asian nation plans major investments to overhaul its creaking infrastructure, shares of most producers have slumped this year. JSW Steel is the lone stock that’s set to end in the green in the 10-member S&P BSE Metal Index, which lost nearly a quarter of its value in 2018. The index is set for its first annual decline in three years, while the country’s benchmark index is edging toward its third year of gains.
The Sajjan Jindal-led mill has risen about 12% this year. That compares with a 26% drop in rival Tata Steel Ltd and a 45% decline in state-run Steel Authority of India Ltd (SAIL). Among base metal producers, Vedanta Ltd has lost 41%.
A fall in global metal prices on trade tensions between the US and China amid higher raw material costs has weighed on the sector. China’s steelmakers are facing their biggest test in three years, as the intensifying trade standoff has added to the pressures on the economy—including the parts that consume most steel. Steel futures in China have fallen over 20% since reaching a seven-year high in August, while the LME Index has fallen about 16% this year, led by declines in zinc, lead and copper.