Steel stocks rise; China cuts production capacity

The steel makers remain hopeful for profit as the steel stocks trek the higher road over China's decision to cut sub-standard steel capacity of over 100 million tonnes. The reduction in the production capacity is coming in addition to a cut of 30 million tonne capacity pre-contrived by China.

The capacity cut by China has surfaced in the wake of declining export. For the past two years, Chinese substandard steel products had distorted the market for global producers with baffling low price of its steel products.

In recent times, China's steel export has significantly decreased to 60 million tonnes from a whopping 120 million tonnes, while the production is likely to further decline with its decision to cut capacity.

As an effect of China's capacity cut, the Indian steel production saw a hike in its production in February 2017 with the production reaching an all time high of 8.8 MT, with an increase of 13 per cent. However, the consumption remained slump with just a 3 percent growth to 7.3 MT on a yearly basis.

The individual production of Essar, JSW and Jindal Steel and Power saw an increase of 5 MT or by 22 per cent on a yearly basis to 28 MT. While, SAIL and Tata Steel's production also saw a hike. Tata Steel's stock value witnessed an increase of 3 per cent, JSW saw an increase of 3.77 per cent, while, Jindal Steel's stock price rose by 4.15 per cent during the day on March 16, 2017.