Tata Steel, JSW Steel, Jindal Steel in focus as rebar prices rally; Nomura retains ‘Buy’

Fresh updates from the financial markets indicate that Tata Steel, JSW Steel and Jindal Steel are in focus after Nomura retained its 'Buy' recommendations on the three stocks, while maintaining a positive stance on the India steel sector amid firm domestic steel prices.

"Rebar prices extend firm surge while HRC stays elevated amid improving market momentum," Nomura stated in its India steel weekly trends report dated September 27.

Domestic HRC prices remained stable at Rs63,800 per tonne in the week ended September 25, "remaining elevated near the highest level in the past four years". Rebar prices rose Rs 1,650 per tonne week-on-week to Rs 62,100 per tonne, "extending the recovery and marking a renewed uptrend after a period of moderation since 1QFY27".

Nomura stated the domestic flat-long spread has "consistently narrowed in favour of long products", with the differential now down to around Rs1,700 per tonne as rebar prices have picked up momentum.

India's HRC spot margin stood at around Rs37,540 per tonne, while 2QFY27F margins have averaged Rs36,000 per tonne so far, "just Rs230/t below 1QFY27's".

Globally, China export HRC prices remained at $510 per tonne, while domestic HRC prices dipped $2 per tonne week-on-week to $493 per tonne. European HRC prices rose $5 per tonne week-on-week to EUR740 per tonne.

On input costs, Nomura stated imported coking coal prices "eased $6/t w-w at $276/t, although still significantly above the Aug-26 average of $232/t amid renewed supply concerns". Global iron ore prices remained stable at around $91 per tonne.

India's finished steel production rose 0.3% year-on-year to 13.48 million tonnes in August, while consumption increased 3.9% to 14.32 million tonnes. India remained a net importer, with imports rising 8% year-on-year to 0.72 million tonnes.

"We maintain our positive outlook on the India steel sector," Nomura stated. The brokerage further noted that "the domestic steel industry is well positioned to benefit in 1HFY27F from the price hikes implemented", which it believes are "more than sufficient to absorb any cost inflation related to raw material".