Tata Steel, JSW Steel, SAIL, Jindal Steel: Top metal stocks to buy; check fresh targets & more

Indian HRC prices rose 7.5 per cent month on month in August 26 to Rs 62,000 per tonne, reaching a multi-year high on the back of a strong seasonal recovery, according to IDBI Capital. Chinese HRC prices also moved up 1 per cent month on month to $500 per tonne, driven by higher raw material prices. The brokerage firm has shared its price targets for select metal stocks.

IDBI Capital said Indian steel production increased 2.1 per cent month on month to 14.4 mn tonnes in Jul-26. In the same period, estimated Chinese steel output fell 8.1 per cent month on month to 77 mn tonnes, while estimated global steel production declined 4.2 per cent month on month to 149 mn tonnes. On the trade front, India remained a net importer of finished steel in Jul-26, with net imports of 0.27 mn tonnes.

On input costs, the report said domestic iron ore prices rose 3 per cent month on month in Aug-26 to Rs7,250 per tonne, while international iron ore prices increased 4 per cent to $94 per tonne. The rise was attributed to a recovery in demand from steel producers along with a monsoon-led supply crunch.

Coking coal prices jumped 30 per cent month on month to $237, driven by major supply disruption in China and a seasonal recovery in steel demand. Manganese prices were flat month on month at Rs19,994 per tonne. In trade dynamics, Indian steel exports fell 1 per cent month on month in Aug-26 to 0.69 mn tonnes, while imports rose 3 per cent to 0.7 mn tonnes, according to IDBI Capital.

On the outlook, IDBI Capital said Chinese HRC prices recovered in August 26, while Indian HRC prices touched a multi-year high, supported by post-monsoon demand recovery across construction, infrastructure and the automobile sector, inventory replenishment by channel partners, and price hikes amid rising input costs.

The report said the sharp increase in coking coal costs, along with a modest rise in iron ore prices, is expected to largely offset the anticipated margin expansion from higher steel prices. IDBI Capital said the re-escalation of the West Asia conflict is likely to keep freight and logistics costs elevated, which could reduce the competitiveness of Chinese steel exports and provide near-term support to domestic HRC prices.

It added that despite elevated sector valuations, it sees selective opportunities at the stock level and maintains a Neutral stance on the sector. The report outlined higher domestic steel prices, elevated input costs, lower exports and higher imports during the period.

The brokerage firm has a 'buy' rating on Jindal Steel Ltd with a target price of Rs 1,224. However, it has recommended a 'hold' rating on Tata Steel Ltd (Target Price: Rs 210), JSW Steel Ltd (Target Price: Rs 1,332) and Steel Authority of India Ltd or SAIL (Target Price: Rs 182)