Morgan Stanley Predicts Extension of Indian Steel Sector Upcycle

India- the world’s second largest steel producing country is likely to take best advantage of the supply tightness in seaborne market.

SEATTLE (Scrap Monster): Morgan Stanley- the New York City-headquartered American multinational investment bank and financial services company announced that it expects the upcycle in Indian steel industry to extend until the end of fiscal year ending March 2023. The sector is likely to witness strong support from demand pickup.

In its report, Morgan Stanley noted that the current cycle is more or less similar to the prior upcycles. The global steel demand is expected to see sharp rebound in 2021, which will be primarily supported by a v-shaped economic recovery.

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The country’s steel sector is likely to reap benefits of Chinese emissions-related reforms, which is expected to lead to production cuts and notable decline in steel export volumes by that country. Incidentally, the Chinese crude steel production is likely to decline by up to 2.3% in 2021, with exports feared to dip by up to 50 million tonnes. India- the world’s second largest steel producing country is likely to take best advantage of the supply tightness in seaborne market.

The supercycle profitability should receive support from higher international steel prices and supply tightness in the domestic market. This in turn will see the beginning of a new capex cycle for Indin steel industry, Morgan Stanley said.

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