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Informist, Friday, Dec. 13, 2024

MUMBAI – Shares of metal companies are seen in a range next week as analysts said improvement in metal prices may take a few more quarters considering the Chinese economy is yet to see significant growth. There is a looming risk of tariffs against China once Donald Trump takes charge as the US president, which could delay recovery in China and further hit product prices. China is the largest consumer of metals.

"Any improvement in metal prices from here depends on China's economy...we think a sustained rise in metal prices is still at least two quarters away," Manish Chowdhury, head of research at Stoxbox, said. He mentioned that stimulus measures announced by China may take one-two quarters to have a positive effect on the country's economy. Going forward, Chowdhury said it is important for companies to keep performing in terms of volumes to help maintain their valuations.

ICRA said cheaper imports from China have hurt the market share of domestic steel companies. Due to this, the rating agency expects capacity utilisation of the domestic steel industry to slip to a four-year low of 78% in 2024-25 (Apr-Mar) from 85% a year ago. The industry's operating profit per tonne of steel production is likely to fall to $110-$115 per tonne in FY25 from $127 per tonne in FY24, while the domestic steel demand is expected to maintain its growth of 10-11% in FY25, ICRA said.

Analysts expect some positive news from the government as they may announce duty against Chinese imports. Such a decision will help metal prices rise in India as domestic demand is expected to remain strong considering better capital expenditure by the government in the second half of this financial year, analysts said. Further, domestic companies may see positive effects of lower coking coal prices, Elara Securities said.

While the overall metal industry is likely to struggle, Elara Securities expect aluminium companies to fare better. "We hold a positive view on the non-ferrous sector and expect higher aluminium and alumina prices, combined with lower thermal coal prices, to positively impact companies in this space in the near term," the brokerage said in a report Thursday.

TOP HEADLINES

* PRESS: JSW Steel plans to diversify into copper, aluminium production
* Vedanta board to meet Monday to consider fourth interim dividend for FY25
* CCI OKs acquisition of thyssenkrupp Electrical Steel India by JSW Steel JV
* CBI court convicts Jayaswal Neco MD in Jharkhand coal block allocation case
* India's copper demand rose 13% to 1.7 mln tn in FY24, says global body
* JSW Steel's Nov consol crude steel output 2.32 mln tn, up 5% on year
* Lloyds Metals to enter mine development and operation business
* Shyam Metalics Nov stainless steel sales 6,064 tn, up 51% on year
* Usha Martin US arm to buy 2% in Thailand arm Usha Siam Steel for INR 36 mln

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Anshul Choudhary

Edited by Deepshikha Bhardwaj

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