Indian Steel sector has had very promising quarterly earnings. With steel prices soaring ahead, the steel industry in India will continue its upward move in the days to come, with an increase in demand.
JSW Steel has posted a record profit for the quarter on Wednesday. The fourth quarter has a record profit of $441.50 million, which is almost three times its previous year’s profit. With good results, the share climbed up with a 0.6% gain in the market.
Tata Steel has however shown a decline in the domestic market. It cites the Kalinganagar plant as the reason for this decline. But in South East Asia, the sales volume is good, according to reports.
Arcelor Mittal has also posted good quarterly results, the best in six years, while ThyssenKrupp has posted double its profits for the quarter.
Both Tata Steel Ltd and JSW Steels have great plans outlined for the immediate future. JSW aims to increase its capacity to 24.7 million metric tons which is an increase of 37% for the next financial year. Tata Steel has a longer plan for 5 years and is set to increase its capacity to 26 million.
By purchasing distressed assets that had become bankrupt, expansion is made easy for these steel giants. Tata Steel is all set to purchase Bhushan Steel Ltd. Additionally, by joining hands with ThyssenKrupp, it may have European operations too, to increase volume and reduce debt.
Domestic consumption is on the increase with good infrastructure facilities provided by the government that has helped boost the steel industry. The steel industry expects a rise of 7.5% in consumption, by the end of 2019.
Another boost to this sector is low exports from China. China is the biggest producer of steel, but with low export, Indian companies expect more demand and more profit with higher price expectation.