Jindal Steel and Power Ltd (JSPL)’s shares increased on April 20 on expectations of a pick-up in Chinese steel demand and weaker coking coal prices.

China is the world’s largest consumer of steel, and coking coal is used to make steel products. Capital markets analysts at CLSA said it was more bullish on JSPL and Tata Steel shares, pushing them higher.

Shares of JSPL were trading at around Rs 587 per share at 9:40 am, up 1.4% from the previous close on the BSE.

According to CLSA Ltd, spot steel spreads are up $40 per tonne compared with levels up to the third quarter of fiscal 2023. It also said the profitability of steel companies such as Tata Steel and JSPL could widen by $50/tonne from third-quarter levels.

Strong domestic demand is expected to help JSPL’s volume growth in the short term, Care Ratings said. JSPL’s recent acquisition of three non-coking coal mines in Odisha and Chhattisgarh states is expected to reduce the company’s reliance on open market purchases of iron ore and non-coking coal, the rating agency said.

JSPL has completed the divestment process of Jindal Power Limited (JPL) for a cash consideration of Rs 3,015 crore in Q1FY23. Accordingly, JPL is no longer a subsidiary or affiliated entity of JSPL.

Shares of JSPL returned about 5% last year and are up 546% over the past three years.