Companies like Tata Steel, JSW Steel, Jindal Steel and Power Ltd (JSPL), and Steel Authority of India Ltd (SAIL) witnessed a significant increase in their share prices, rising by up to 5.1%. This surge also propelled the Nifty metal index to end the day with a gain of 2.49%.
The boost in steel stocks and the metals and mining sector overall came on the back of strong industrial growth numbers reported in China. China’s industrial output surged by 7% in January and February compared to the same period last year, surpassing economists’ predictions. This growth was accompanied by an increase in fixed-asset investment and retail sales, aligning with projections.
China, being the largest consumer of commodities globally, influences global steel demand and commodity prices. A rise in demand from China can uplift global steel demand and commodity prices, which were previously under pressure due to weak demand from China.
In India, steel prices had been on a downtrend, with domestic hot-rolled coil (HRC) and rebar prices falling by 4% and 7% respectively in the fourth quarter of FY24. However, the surge in China’s industrial output could potentially support iron ore and coal prices, which have also been impacted by fluctuations in demand.
The rise in iron ore prices, which had fallen from around $150 a tonne to $110 a tonne, resulted in fluctuations in the stock prices of mining companies like NMDC. However, NMDC’s share price rebounded by 2.12% on Monday.
Other mining stocks, such as Coal India, also witnessed gains, closing the day with a 1.63% increase on Monday.
