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Informist, Friday, Jun. 5, 2026

 

MUMBAI – Shares of ferrous companies are likely to consolidate in the near term as demand is likely to be "muted" with the onset of the monsoon, analysts said. The rise in coking coal prices, a key raw material for these companies, is also a concern, even though the impact on margins is seen as minimal. Tata Steel is expected to remain in the limelight after a fire was reported at its UK plant in Port Talbot.

 

Even though steel prices are at relatively higher levels, long steel product prices have fallen this week. The price of hot rolled coil steel in the domestic market fell by INR 300 to INR 58,400 per tonne, according to an analyst at a domestic brokerage. "I think once monsoon goes and demand comes back, obviously, we can (see) increase (in) the prices, steel companies," the analyst said. "They (steel companies) may not outperform the market, mainly because, since it is monsoon, demand is relatively muted. And valuation is also largely on the higher side," he added.

 

The analyst prefers Jindal Stainless in the near term and said investors should "accumulate" the shares, as they are at attractive valuations. Even though it has fallen by about 15% over the last month, the company's fundamentals remain strong. "The issue was LPG (liquefied petroleum gas), and LPG availability has improved, plus the company has converted into LNG (liquefied natural gas) for their plants. So the production disruption, which was happening, will not happen now. Production will continue," he said.

 

Prices of coking coal rose by 6% this week, according to Ajit Sahu, research analyst at IDBI Capital. Concerns about supply after an accident at the Liushenyu coal mine in China's northern Shanxi province have pushed up prices. Sahu sees the rise in coking coal costs having only a minimal impact on margins.

 

The Nifty Metal Friday closed at 13221.65 points, down 1.6%, falling for the third straight session as traders booked profits. The index also fell due to the fall in steel prices. Adani Enterprises and APL Apollo Tubes were the top gainers among the index constituents, ending 2.5% and around 1% higher, respectively. Vedanta and Welspun Corp. were the underperformers. 
 

The Nifty Metal index is expected to move in a range next week, with support level seen at 13000 and resistance at 13400, according to Jay Vora, technical analyst at Mirae Asset Sharekhan.

 

So far, Tata Steel shares have fallen by over 4% following the fire in the UK. Tata Steel's stock closed at INR 206.77 on the NSE on Friday, down 1.8%. "The company is investigating a number of options in order to minimise the potential impact on its downstream businesses and external customers," Tata Steel said in a statement Thursday. Sahu said the initial impact appears to be moderate to high since the plant was shut down. Analysts await more details from the company to fully assess the situation.

 

Shares of mining companies such as NMDC could see pressure in the coming weeks after the Supreme Court on Thursday held that state governments can levy higher royalties on mining companies than specified in the tender agreement, following subsequent changes in the law. "That is also one reason, probably, steel stocks will be down," the analyst said. Another analyst told Informist that the royalty rate charged in India is around 40%, one of the highest globally, and does not expect states to charge more "anytime soon."

 

TOP HEADLINES

 

* CNBC-TV18: Tata Steel assessing cause of fire, damage at Port Talbot UK plant
* Shyam Metalics stainless steel sales up in May, aluminium foil sales plummet
* Fire breaks out at Tata Steel's UK plant, all personnel evacuated safely
* Tata Steel eyes downstream value play, new client segments - Annual report
* Vedanta says ED carried out searches at premises under FEMA provisions
* Hindalco launches Eternia store in New Delhi, offering aluminium windows
* Tata Steel restates concern on stability of Netherlands ops in annual report
* Tata Steel seeks shareholder OK for related party deals with Tata Cap, others
* Talwandi Sabo Power renamed Vedanta Power, effective Wednesday
* NCLT OKs Oliver Engineering's, Adicca Energy's merger with Kirloskar Ferrous
* ED team visits office premises of Vedanta Ltd., arm Hindustan Zinc
* Cable, wire cos' top line to rise 28-30% in FY27 led by price hikes - Crisil
* US cuts tariffs on some farm equipment, offers sops on domestic metals use
* Jindal Stainless to recommend Kunjal Mehta for CFO position to board
* W Asia crisis to drive profitability of domestic aluminium producers: Crisil
* Jai Balaji Ind Jan-Mar PAT falls 72% on year to INR 214 million
* BNP Paribas sells almost 1% in NALCO for INR 6.87 bln via bulk deal on NSE
* NMDC Steel posts INR 3.92 billion PAT in Jan-Mar vs loss year, quarter ago
* Hind Zinc extends CEO Arun Misra's term by 2 months, names Amit Gupta as CFO
* Moody's ups credit ratings of TCS, Infosys, Reliance Industries, Tata Steel
* Hindustan Copper, Lohum in 20-year pact to restart Gujarat plant

 

The 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:

 

Company	Price	Week-on-week  change in %	Resistance	Support
HINDALCO INDUSTRIES LTD	1,092.60	(-)3.00	1,147.20	1,062.80
HINDUSTAN COPPER LTD	526.35	(-)2.30	548.40	511.70
HINDUSTAN ZINC LTD	566.80	(-)10.50	620.30	537.20
JINDAL STEEL LTD	1,181.30	(-)2.20	1,223.10	1,144.50
JSW STEEL LTD	1,284.00	0.50	1,330.10	1,243.50
JINDAL STAINLESS LTD	690.65	0.80	718.60	673.00
NATIONAL ALUMINIUM COMPANY LTD	395.70	(-)6.80	420.90	378.90
NMDC LTD	92.90	5.60	96.60	89.80
STEEL AUTHORITY OF INDIA LTD	190.56	(-)6.80	202.30	182.40
TATA STEEL LTD	206.77	(-)0.60	213.70	200.50
VEDANTA LTD	315.60	(-)10.50	336.60	301.90
Index	Levels
NIFTY METAL	13221.65	(-)1.60	13625.00	12924.20
NIFTY 50	23366.70	(-)0.80	23622.30	23154.90
BSE SENSEX	74243.34	(-)0.70	75045.40	73587.70

 

End

 

Reported by Ashutosh Pati

Edited by Saji George Titus

 

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