Stock Market Today: Tata Steel, JSW Steel, JSPL, SAIL shares gained up to 6 anal% during the intraday trades on Wednesday.
The gains for the Tata Steel, JSW Steel, JSPL, SAIL shares among other steel stocks is being driven by four key reasons.
Among the key reasons are the expectations of China rationalizing production and also expect that steel prices have likely bottomed out while lower input costs continue to support profitability. The Dollar weakening also remains supportive for exports, which already are on a rise as per experts
What’s driving the rally in steel stocks explained with 4 reasons
China steel production rationalization News reports suggest that China may aims to reduce steel production between 2025 and 2026 and the same is adding to the optimism. China is the largest producer and consumer of commodities in the world and any production cut in China can rationalise international steel supplies and prices and address global overcapacity, which has kept steel prices under pressure for months. This measure is intended to reduce the inflow of low-cost steel into India, benefiting domestic metal producers too.
Dollar weakening remains positive – Steel stocks are trading higher today as the dollar weakening led to an increased demand for commodities, said Anubhav Sangal, Sr. Research Analyst at Bonanza.
Generally, when the dollar weakens, international buyers of commodities can buy more units for $1 as the commodities are traded in dollars. This comes as a positive news for Indian metal producers as the demand increase could indicate improved production for the Indian mills. Furthermore, this has led to an upward EBITDA revision for the metal producers in India for FY26.
Steel profitability to remain strong
The steel price that had decline with onset of monsoon may start looking up as the monsoon season may end soon. The steel demand remains robust while input price as that of Coal and ironore are soft. The decline in China production can mean lower input cost benefits continuing for producers.
Rising exports a positive
Domestic steel demand is firm, with 7.4% yoy growth in July 2025 after 7.8%growth in 1QFY26. Trade barriers reduced imports ((-)40% in 4MFY26), whereas exports have increased 8% in 4MFY26, as per Kotak Institutional Equities data.
India has become a net exporter again and recently, the DGTR suggested an Extending the provisional safeguard duty for another three years, which is again positive though requires approval from the Finance Ministry.
Kotak Institutional equities sees a 3-5% upside risk to its EBITDA estimates for FY2027-28E, in case the safeguard duty continues.