Morgan Stanley believes that steel prices are likely to spike in the first week of June across various products.
The price of hot rolled coil (HRC) is likely to increase by Rs 3,250 per tonne while cold rolled coil’s (CRC’s) price is expected to be anything between Rs 5,000 per tonne and Rs 10,000 per tonne. Meanwhile, long steel product prices are likely to remain unchanged since there are no construction activities underway.
Morgan Stanley believes that post this price hike, the premium at which steel is imported will reduce to around 5 percent in comparison to domestic steel.
If this price increase holds, it could have a positive rub-off for the next few quarters and earnings are likely to revise upwards, the brokerage house added.
Morgan Stanley is also positive on JSW Steel and Tata Steel.
Watch the accompanying video of CNBC-TV18’s Nigel D’Souza for more details.