China steel output cut won't hit prices in India: Pro

What may have seemed to be a positive for steel stocks, China deciding to stop production of low quality steel using medium frequency induction furnaces is not going to have any impact on steel prices in India, says Independent Analyst, Rakesh Arora. He says the the low quality steel produced from the soon to be shut medium frequency furnaces, is not exported out of China. This isn't anything new and the capacity cutting is in line with its target of cutting capacity of 150 million tonnes. He advises holding onto metal stocks for another 2-3 months before booking profits.

Due to the high prices, traders should refrain from buying fresh metal stocks at current levels. Even if the steel supply were to be affected in Asia due to the ban on furnaces by China, the current demand conditions will not support a hike in prices.