Morgan Stanley says Indian steel producers could increase prices
supported by strong demand and higher international prices. It sees maximum upside potential in JSPL and SAIL. It expects a price hike of US$10-15/t could come for flat products. For long products, secondary market prices have recovered by Rs5,500/t from the bottom in early Feb-21. Post the Budget steel prices stayed put which increased the discount to import parity price to 8%. Now with demand increasing, international prices improving there is scope for price hikes. It says that every 5% increase in steel realizations would have a 13-15% impact on EBITDA for Tata Steel/JSW/JSPL, and a 25-30% impact on SAIL. "We think Indian steel companies are well placed to exit this cycle with significantly de-leveraged balance sheets", says Morgan Stanley.

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