India’s Steel Demand Stays Strong Despite Global Slowdown, Says Shriram Mutual Fund Report
A recent report by Shriram Mutual Fund reveals that while the global steel market is experiencing low demand, India’s domestic demand for steel remains strong. This is despite challenges such as recent elections and ongoing heatwaves.
The report highlights a significant increase in steel imports to India, which have risen by 67% year-on-year. Most of these imports come from China, South Korea, and Japan. This influx has contributed to a decline in steel prices due to increased supply.
Looking ahead, the report suggests a positive long-term outlook for steel demand in India, driven by growth in the infrastructure and real estate sectors. These industries are expected to continue expanding, supporting sustained demand for steel.
In terms of market performance, the Nifty Metal Index has shown mixed results. It posted a negative return of 0.67% over the last month and declined by 1.47% over three months. However, the six-month returns are positive at 18.72%, indicating a potential long-term recovery.
The report also notes challenges in the banking sector, where slower growth and rising credit demand are putting pressure on banks to mobilize deposits. This has led to higher deposit rates and a potential squeeze on Net Interest Margins (NIM). Banks with strong liability franchises and growing market share are better positioned to navigate these challenges.
Investors are advised to focus on these resilient banks as the sector faces a challenging environment.
Doubts Revealed
Shriram Mutual Fund -: Shriram Mutual Fund is a company in India that helps people invest their money in different things like stocks and bonds to make more money.
Global Slowdown -: Global slowdown means that the economies of many countries around the world are not growing as fast as they used to.
Steel Demand -: Steel demand refers to how much steel people and companies want to buy and use for building things like bridges, buildings, and cars.
Elections -: Elections are events where people vote to choose their leaders, like the Prime Minister or members of Parliament.
Heatwaves -: Heatwaves are periods of very hot weather that can make it hard for people to work and can affect things like farming and construction.
Year-on-year -: Year-on-year means comparing something, like steel imports, from one year to the same time in the next year.
Infrastructure -: Infrastructure includes things like roads, bridges, and buildings that are necessary for a country to function well.
Real Estate -: Real estate refers to property like land and buildings that people can buy, sell, or rent.
Nifty Metal Index -: The Nifty Metal Index is a measure of how well metal companies in India are doing in the stock market.
Volatility -: Volatility means that something, like stock prices, goes up and down a lot in a short period of time.
Banking Sector -: The banking sector includes all the banks and financial institutions that help people save and borrow money.
Deposit Rates -: Deposit rates are the interest rates that banks pay to people who keep their money in savings accounts.
