InvestorQ : What will be the impact on stocks like Tata Steel, JSW Steel and SAIL with the government asking oil and gas companies to use more of Indian steel?
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What will be the impact on stocks like Tata Steel, JSW Steel and SAIL with the government asking oil and gas companies to use more of Indian steel?

Answer
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3 months ago


While there are no instructions on that front, the Petroleum Minister Dharmendra Pradhan has indicated that oil companies have been asked to focus more on domestically produced steel. The ideas is that when oil and gas companies embark on expansion of their refining facilities, they create more demand for domestic steel rather than importing. Indian oil companies are expected to invest close to $160 billion by 2026 to expand refining capacity resulting in a huge spurt in steel demand. The oil and gas sector alone is anticipated to consume around 50 million tonnes of steel in the next 10-15 years. Steel makers like Tata Steel, JSW Steel and SAIL could be the big beneficiaries. While India is already the world’s second largest steel producer after China, imports are substantial as most domestic production is not suited to high end steel usage. With most countries looking inward, it is best that India also focuses on enhancing domestic demand to benefit Indian companies.