JSW Steel announces Positive Outlook for 2007

JSW Steel Ltd has announced the Outlook for 2007. The global finished steel consumption is expected to touch 1.178 billion tones in 2007 showing a growth of 5.8%. The policy announcements, namely reduction / removal of export rebates on steel products, imposition of export tax on semis, discouraging tolling activities through the levy of taxes, imposition of quantity restrictions on export of certain products show the intent of Chinese policy makers to discourage export of low value added steel products. It is estimated by certain steel analysts that the net steel exports in 2007 from China will decline to approximately 10 million tones vis-à-vis 25 million tones in 2006.

The weakening US Dollar is expected to keep the steel prices in Dollar terms at higher levels. Shortage of metallics, surging freight costs will continue to keep the cost of production high for steel manufacturers. The world economy is estimated to grow at 3.5% in 2007 as per IMF, which is again a big positive for the steel industry. At the back drop of clocking 9.2% growth in GDP in 2006-07, India is poised to maintain the growth momentum. In this environment, 2007 is expected to be a good year for the steel industry in spite of challenges of appreciating Rupee and hardening interest rates in the domestic market.

Source : Equity Bulls

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