Stock Market Today: Tata Steel, JSW Steel, JSPL, SAIL and other steel stocks gained up to 6% in intraday trade on Wednesday.
The gains in shares of Tata Steel, JSW Steel, JSPL, and SAIL were driven by four key factors. One of the main reasons is the expectation that China will rationalise its steel production. Additionally, steel prices have likely bottomed out, and lower input costs continue to support profitability. The weakening of the dollar also remains supportive of exports, which, according to experts, are already on the rise.
What’s driving the rally in steel stocks? Explained
Here are the key factors behind the gains in steel stocks today:
China’s steel production rationalisation
News reports suggest that China aims to reduce steel production between 2025 and 2026, and the same is adding to the optimism around steel stocks.
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.
Weak US dollar
Steel stocks are trading higher today as the weakening dollar has 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 positive news for Indian metal producers, as the increased demand 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.
Stable steel prices, lower input costs
The steel price that had declined with the onset of the monsoon may start looking up as the monsoon season may end soon. The steel demand remains robust while input prices as those of coal and iron ore, are soft. The decline in China’s production can mean lower input cost benefits continuing for producers.
Rising exports
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 extending the provisional safeguard duty for another three years, which is again positive, though it 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.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
