JSW Steel Ltd. snapped its longest losing streak since May 1997, but rising iron ore prices may continue to weigh on the company’s performance.
The Sajjan Jindal-led company will be the worst hit among steelmakers as it has no captive resources and purchases iron ore from the open market, according to IIFL Wealth Management.
Prices of iron ore, an essential raw material for steel, have been on the upswing and are set to clock fifth straight week of gains. Meanwhile, Shanghai Steel prices gained 5 percent in the last 10 days.
JSW Steel fell for the 11th consecutive session on Wednesday, and hit a three-month low. The stock recovered early on Thursday, rising as much as 2.5 percent to Rs 248 apiece.
Iron Ore Supply
Tracking the global trend, India’s largest iron ore miner NMDC Ltd. increased prices of lump iron ore by 13 percent in November over October to Rs 2,600 a tonne—the sharpest increase since the 23 percent jump in October last year.
Source: Bloomberg Quint