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Informist, Friday, Sept. 5, 2025

MUMBAI – The optimism over China's aim to cut its steel capacity and production is expected to continue next week with metal stocks seen rising further. China's "anti-involution" campaign to curb excess capacity and price wars in energy and solar supply chains will continue to aid the Indian metals sector, analysts said.

China will lower its steel capacity by 50 million tonnes in 2025 and cut production by 8.5% for the rest of the year, global brokerage CLSA said in a report. Although China's steel production fell 20 million tonnes over Jan-Jul, its steel exports are at a record high, while Indian steel prices are at a discount to import parity, the brokerage said.

The Nifty Metal closed 0.7% higher at 9681.65 points and was the top gainer on week among the sectoral indices. The index ended the week on a positive note and has maintained its gains over the week and a month. The index gained 5.8% over the week and 3.7% so far since Aug. 1. The index closed in positive territory this week after falling the previous week. The immediate support for the Nifty Metal is pegged at 9400 points and resistance at 10000 points.

The government may raise the safeguard duty on steel products if imports remain high, Informist had reported, citing a top commerce ministry official. The government had imposed 12% provisional safeguard duty Apr. 21 for 200 days on the import of some steel products to prevent cheap foreign goods flooding the domestic market. India Brand Equity Foundation, an initiative under the Ministry of Commerce and Industry, said the government plans to reduce imports by 50% in FY26 to become a net exporter of steel in the near future. The safeguard duty could potentially lead to a decrease in imports and increase market competitiveness, it said.

If downstream value-added products are removed from free trade agreements, then India can become a global leader in aluminium extrusion products, Jitendra Chopra, president of the Aluminium Extrusion Manufacturers Association of India, had said at a press conference. This is only possible if the government supports micro, small, and medium enterprises.

India is the world's second-largest steel producer, with an output of 137.96 million tonnes of crude steel and finished steel production of 132.57 million tonnes in the financial year 2024-25 (Apr-Mar), according to data from India Brand Equity Foundation. India's domestic steel demand is estimated to have grown 9-10% in FY25, as per ICRA, it said.

The domestic availability of raw materials such as iron ore and cost-effective labour have driven growth in the Indian steel sector, India Brand Equity Foundation said. Consequently, the sector has been a major contributor to India's manufacturing output, it said. India's manufacturing activity in August expanded at the quickest pace in over 17 years, with the HSBC India Manufacturing Purchasing Managers' Index rising to 59.3 from 59.1 in July, S&P Global's data showed. The print for August was the highest since February 2008. According to a Deloitte report, demand for steel in India is projected to grow significantly over the next decade, with annual growth rates expected to range from 5-7.3%.

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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

Reported by Simran Rede

Edited by Rajeev Pai

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