Morgan Stanley has shared a fresh update on the Indian steel sector, flagging both near-term positives and risks for the industry.
The brokerage noted that Indian steel remains about 15% more expensive than imported steel, even after factoring in import duties.
Steel imports into India have decreased recently, helping local steel prices stay firm. However, imports might rise again if the price gap persists, which could weigh on domestic pricing power going forward.
At the same time, Indian steel stocks have rallied recently, led by strong domestic demand trends.
Morgan Stanley also pointed to positive news from China, where policy signals suggest potential cuts in Chinese steel supply — which, if sustained, could provide further support to global steel prices and sentiment for Indian players.
Overall, while domestic demand is a tailwind for Indian steel stocks, Morgan Stanley will be closely monitoring trends in imports, global supply, and pricing spreads to gauge the sustainability of the current rally.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
