Steel Barons

Index : 1,446 | 1Yr : -11.94% | 1Mo : +7.21%

Category : Sectoral Trackers

Min Investment : 1,330

Sharpe Volatility Trend

Being among the largest producer in the world, the steel industry has a major contribution to the manufacturing output of India. Due to the rich iron ore resources, the industry can cater to the demand for steel which mainly comes from automobiles, construction and capital goods sectors. The performance these sectors is a leading indication to the performance of the steel industry in general. India is the third largest manufacturer of steel and in times of lackluster demand, it is exposed to the dangers of cheap chinese imported steel which can impact domestic companies to a large extent as seen in the past. The government's role is crucial in this regard as anti-dumping policies need to be imposed and modified from time to time.

The industry is affected by iron ore prices, global growth, demand supply factors, import duty, government policies and interest rates. The ambitious infrastructure plans and the Make in India initiative will be instrumental in driving demand for steel in the future. As a core sector, steel consumption also indicates overall economic growth in the country. Invest in companies that have managed to withstand the volatile business cycles and managed debt at sustainable levels. Due to a combination of factors, these businesses are more resilient in comparison their peer group.

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