Morgan Stanley On Indian Steel – Media Report – Tata Steel, SAIL, JSPL – Positive
· Large steel players have announced price hikes of Rs 2,000-2,500 per tonne across product portfolios
· HRC prices in India have moved up by Rs 12,000-13,000 per tonne while long product prices have increased by $110-120 per tonne
· Dealer checks suggest that there is potential for another hike in mid-December
· Current Indian HRC prices are at a 6% discount to import parity prices from China
· Tata Steel, SAIL likely to be biggest beneficiaries of current price hikes, given backward integration into captive iron ore mines
· JSPL to also benefit in the short-term until it is able to consume its pre-paid iron ore inventory
· Indian steel companies are well placed for H2FY21
· Material earnings upgrades likely if this trend would continue for a few months