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Informist, Friday, Jun. 6, 2025

MUMBAI – Shares of constituents of the Nifty Metal index are seen rising next week after a consolidation phase lasting several months. The sectoral index has fallen for six of the past eight months, but now the technical charts indicate a channel breakout at the end of a prolonged corrective phase, analysts said. "The index has been consolidating for four months in the vicinity of the 100-week EMA (exponential moving average) making a strong base," ICICI Securities said in a report.

During May, steel prices in India declined 2.1% on month to INR 51,400, or about $599, per tonne, but remained unchanged in China at $455 per tonne. Coking coal prices fell 2% on month to $148 per tonne amid subdued global demand. Prices of aluminium rose 2.8% on month to $2,438 per tonne as US President Donald Trump announced 50% tariffs on aluminium imports.

Steel prices in India fell in May also because of the early onset of the southwest monsoon, which slowed down the construction sector, a major consumer of the commodity. Domestically, rising production capacity is likely to keep steel prices under pressure even when demand picks up.

Domestic hot-rolled coil steel prices recovered 7% on the imposition of a safeguard duty by the government. These prices continued to be at a premium to Chinese import parity prices. However, the spot prices of hot-rolled steel fell 3% in May after the early onset of rains.

A fall in iron ore and coking coal prices may support margins in the coming quarter, according to analysts. However, valuations continue to be rich and may limit the near-term upside in metal stocks, they said. Demand for steel is likely to remain strong, according to Antique Stock Broking. The World Steel Association has projected India's steel demand to rise by 8.5% on year to 156 million tonnes in 2025. 

Chinese steel output fell and exports remained flat, keeping hot-rolled steel prices stable amid soft local demand and rising US tariffs. Steel exports from China are likely to slow down on rationalisation of steel production in the country and possible stimulus measures following the imposition of import tariffs by the US, according to Antique.

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

End

US$1 = INR 85.62

Reported by Simran Rede

Edited by Rajeev Pai

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